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In a recent sample of 84used car sales costs, the sample mean was 6,425with a standard deviation of 3,156. Assume the underlying distribution is approximately normal.

a.Which distribution should you use for this problem? Explain your choice.

b. Define the random variable X 炉 in words.

c. Construct a 95%confidence interval for the population mean cost of a used car.

i. State the confidence interval

ii. Sketch the graph.

iii. Calculate the error bound

d. Explain what a 鈥95%confidence interval鈥 means for this study

Short Answer

Expert verified

a. For this problem we should use the Student's t-distribution with n-1=83the degrees of freedom, where nrepresents the size of the sample. b. Random variable Xis the mean number of costs from a sample of 84used car sales. c. A 95%confidence interval for the population mean is5.7367.114 and E B M=0.689. d. With 95%confidence the true population mean is between 5.736and 7.114.

Step by step solution

01

Expression of variable random (part a)

For this problem we should use the Student's t-distribution with n-1=83n-1=83the degrees of freedom, where nrepresents the size of the sample. We use the Student's t-distribution because we don't know the standard deviation for the population. Random variable Xis the mean number of costs from a sample of 84 used car sales. If xand Sare the mean and standard deviation of a random sample from a normal distribution with unknown variance 2,$\textbf{a100(1-)%confidence interval on} is given by

x-t2,n-1snx+t2,n-1sn

where t2,n-1is the upper 1002percentage point of the tdistribution with n-1degrees of freedom.

We need to find a 95%on the population mean, then

2=1-0.952=0.025t2,n-1=t0.025,83=1.99

We used a probability table for the student 's t- distribution to find the value of t. The table gives t-scores that correspond to degrees of freedom (row) and the confidence level (column). The t-score is found where the row and column intersect in the table.

We know that the sample mean was with a standard deviation of s = 3.156

Now from the equation (1) and (2) we get

02

Sketch the graph

  • A 95%CI foris

5.7367.114

  • The graph of this problem is

03

Expand of variable 

  • The error bound is

EBM=0.689.

4257b2{ with 95%confidence the true population mean is between 5.736and 7.114}

  • Ninety - five percent of all confidence intervals constructed in this way contain the true mean statistics exam score. For example, if we constructed 100of these confidence intervals, we would expect95of them to contain the true population mean.

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