Question

A real estate agent needs to estimate the average value of a residential property of a given size in a certain area. The real estate agent believes that the standard deviation of the property values is

Answer 1

Follows are the solution to this question:

Explanation:

`95 \% \` the confidence level for z:

`\alpha = 1 - 95 \% \\\\`

`= 1 - 0.95 \\\\ = 0.05`

`\to (\alpha)/(2) = (0.05)/(2) = 0.025\\\\\\to Z \ (\alpha)/(2) = Z_(0.025) = 1.96`

Calculating the Margin of error:

`E = Z\ (\alpha)/(2) * ( (\sigma)/(√(n)))`

`= 1.96 * ( \frac{5000}{\sqrt{√(100)}})\\\\= 980`

The population means estimate a 95 % confidence interval is:

`\to \bar{x} (+)/(-) E\\\\ = \$ 90000 (+)/(-) 980`