A survey of 144 retail stores revealed that the average price of a microwave was $375 with a standard error of $20. What is the 80% confidence interval of the true average price of the microwave?

1 Answer
BeeFree
Nov 23, 2015

The sample size is large, so use a Standard Normal distribution ...

Explanation:

The z-values for an 80% confidence interval is #z=+-1.282#

#CI=barx+-(z)xx(S.E.)#

#CI=375+-(1.282)(20)=(349.36, 400.64)#

[Note: the above solution assumes that 20 is truly the standard error and not the sample standard deviation . Otherwise, divide 20 by #sqrt144#]

Hope that helped

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