Answer:
The point estimate is 5,617.
The margin of error of a confidence interval for the difference between the two population means is 454.18386
.
The 98% confidence interval for the difference between the two population means is (5163, 6071).
Step-by-step explanation:
Before building the confidence interval, we need to understand the central limit theorem and subtraction of normal variables.
Central Limit Theorem
The Central Limit Theorem establishes that, for a normally distributed random variable X, with mean
and standard deviation
, the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean
and standard deviation
.
For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.
Subtraction between normal variables:
When two normal variables are subtracted, the mean is the difference of the means, while the standard deviation is the square root of the sum of the variances.
Compound 1:
127 brakes, average brake life of 42,814 miles, population standard deviation of 1819 miles. This means that:
![\mu_1 = 42814](https://tex.z-dn.net/?f=%5Cmu_1%20%3D%2042814)
![s_1 = \frac{1819}{\sqrt{127}} = 161.41](https://tex.z-dn.net/?f=s_1%20%3D%20%5Cfrac%7B1819%7D%7B%5Csqrt%7B127%7D%7D%20%3D%20161.41)
Compound 2:
163 brakes, average brake life of 37,197 miles, population standard deviation of 1401 miles. This means that:
![\mu_2 = 37197](https://tex.z-dn.net/?f=%5Cmu_2%20%3D%2037197)
![s_2 = \frac{1401}{\sqrt{163}} = 109.73](https://tex.z-dn.net/?f=s_2%20%3D%20%5Cfrac%7B1401%7D%7B%5Csqrt%7B163%7D%7D%20%3D%20109.73)
Distribution of the difference:
![\mu = \mu_1 - \mu_2 = 42814 - 37197 = 5617](https://tex.z-dn.net/?f=%5Cmu%20%3D%20%5Cmu_1%20-%20%5Cmu_2%20%3D%2042814%20-%2037197%20%3D%205617)
The point estimate is 5,617.
![s = \sqrt{s_1^2 + s_2^2} = \sqrt{161.41^2 + 109.73^2} = 195.18](https://tex.z-dn.net/?f=s%20%3D%20%5Csqrt%7Bs_1%5E2%20%2B%20s_2%5E2%7D%20%3D%20%5Csqrt%7B161.41%5E2%20%2B%20109.73%5E2%7D%20%3D%20195.18)
Confidence interval
The confidence interval is:
![\mu \pm zs](https://tex.z-dn.net/?f=%5Cmu%20%5Cpm%20zs)
In which
z is the z-score that has a p-value of
.
The margin of error is:
![M = zs](https://tex.z-dn.net/?f=M%20%3D%20zs)
98% confidence level
So
, z is the value of Z that has a p-value of
, so
.
Margin of error:
![M = zs = 195.18*2.327 = 454.18386 ](https://tex.z-dn.net/?f=M%20%3D%20zs%20%3D%20195.18%2A2.327%20%3D%20454.18386%0A)
The margin of error of a confidence interval for the difference between the two population means is 454.18386
.
For the confidence interval, as we round to the nearest whole number, we round it 454. So
The lower bound of the interval is:
![\mu - zs = \mu - M = 5617 - 454 = 5163](https://tex.z-dn.net/?f=%5Cmu%20-%20zs%20%3D%20%5Cmu%20-%20M%20%3D%205617%20-%20454%20%3D%205163)
The upper bound of the interval is:
![\mu + zs = \mu + M = 5617 + 454 = 6071](https://tex.z-dn.net/?f=%5Cmu%20%2B%20zs%20%3D%20%5Cmu%20%2B%20M%20%3D%205617%20%2B%20454%20%3D%206071)
The 98% confidence interval for the difference between the two population means is (5163, 6071).