Answer:
Step-by-step explanation:
Using the formula for calculating the confidence interval to estimate an interval for the mean rate of return on all real estate investments with 95% confidence;
Confidence Interval = xbar±(Z*S/√n)
xbar is the mean = 20%(assumed since we are not given)
n is the sample size = 200
S is the standard deviation = 2.25%
Z is the Z score at 95% confidence interval = 1.960
Confidence Interval = 20±(1.96*2.25/√200)
Confidence Interval = 20±(1.96*2.25/14.14)
Confidence Interval = 20±(1.96*0.159)
Confidence Interval = 20±0.312
Confidence Interval = (20-0.312, 20+0.312)
Confidence Interval = (19.688, 20.312)
Hence the interval for the mean rate of return on all real estate investments with 95% confidence is 19.688<x<20.312.
This means that the minimum rate of return on investment is 19.688% and the maximum rate of return on investment is 20.312%.(assuming 20% as the mean)
