Question

A survey of 50 retail stores revealed that the average price of a microwave was $375, with a sample standard deviation of $20 (i.e. the population standard deviation was not known). Assuming the population is normally distributed, what is the 95% confidence interval to estimate the true cost of the microwave?a) $323.40 to $426.60b) $328.40 to $421.60c) $350.80 to $395.80d) $369.31 to $380.69

Answer 1

Answer: d) $369.31 to $380.69

Explanation:

Given;

Mean price x= $375

Standard deviation r= $20

Number of retail stores n = 50

Confidence interval of 95%

Z*(95%) = 1.96

Confidence interval = x+/-Z*(r/√n)

= $375+/- 1.96(20/√50)

= $375+/- 5.69

Confidence interval = ($369.31 to $380.79)