A researcher is interested in the size of the current balance of credit card hol

Question

A researcher is interested in the size of the current balance of credit card holders. To estimate this, he obtains the size of the current balance of a random sample of 25 credit card holders. A 90% confidence interval for the mean current balance of credit card holders is found to be $662.72 +or- $44.70.   Which of the following would produce a confidence interval with a smaller margin of error than this 90% confidence interval?

a) Obtain the balances of only five credit card holders rather than 25, because five are likely to be more uniform than 25

b) Obtain the balances of 100 credit card holders rather than 25

c) Compute a 99% confidence interval rather than a 90% confidence interval. The increase in confidence indicates that we have a better interval.

d) None of the above

Explanation / Answer

margin of error = z*std deviation/sqrt(n)

greater the n smaller is themargin of error

Therefore increase the number ofcredit card holders

b) Obtain the balances of 100 credit card holders rather than 25

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