# A research firm wants to estimate the true population proportion of families having annual incomes that exceed $100,000 in a particular city. If it costs $20 to obtain each sample value, how large must the sampling budget be?"

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The firm would like to have 98% confidence, and a margin of error no larger than 3 percentage points, but currently has no information regarding how large the true population proportion might be.

The firm would like to have 98% confidence, and a margin of error no larger than 3 percentage points, but currently has no information regarding how large the true population proportion might be.

##### 1 Answer

Jul 23, 2017

one approach is to use the confidence interval formula and determine n

we are given the following constraints

We don't know the variance in order to solve for

so we know we shouldn't need to select any more than 1508 users at worst case, the budget can be reduced to 1508*20 = $30,160