Question

4)In order to set rates, an insurance company is trying to estimate the number of sick daysthat full time workers at an auto repair shop take per year. A previous study indicated thatthe standard deviation was2.2 days. a) How large a sample must be selected if thecompany wants to be 92% confident that the true mean differs from the sample mean by nomore than 1 day

Answer 1

Answer:

A sample of 18 is required.

Step-by-step explanation:

We have that to find our $\alpha$ level, that is the subtraction of 1 by the confidence interval divided by 2. So:

$\alpha = \frac{1 - 0.92}{2} = 0.04$

Now, we have to find z in the Z-table as such z has a p-value of $1 - \alpha$.

That is z with a pvalue of $1 - 0.04 = 0.96$, so Z = 1.88.

Now, find the margin of error M as such

$M = z\frac{\sigma}{\sqrt{n}}$

In which $\sigma$ is the standard deviation of the population and n is the size of the sample.

A previous study indicated that the standard deviation was 2.2 days.

This means that $\sigma = 2.2$

How large a sample must be selected if the company wants to be 92% confident that the true mean differs from the sample mean by no more than 1 day?

This is n for which M = 1. So

$M = z\frac{\sigma}{\sqrt{n}}$

$1 = 1.88\frac{2.2}{\sqrt{n}}$

$\sqrt{n} = 1.88*2.2$

$(\sqrt{n})^2 = (1.88*2.2)^2$

$n = 17.1$

Rounding up:

A sample of 18 is required.