A business that repairs major appliances charges a flat fee plus and hourly amou

Question

A business that repairs major appliances charges a flat fee plus and hourly amount plus the cost of any needed parts. They know that the time required to repair an appliance has a standard deviation of 0.25 hours. The mean depends on the type of appliance. To estimate the true mean time required to repair side-by-side refrigerators, they will take a random sample of 60 refrigerator repairs. If they want a 99% confidence interval, what will the margin of error in their estimate be? Your answer should be a number rounded to TWO decimal places.

Explanation / Answer

99% confidence interval means you want (1-.99)/2 = .005 on eitherside. Using a z table, we see this corresponds to z = 2.575and -2.575. The standard deviation of their sample is .25 / sqrt(60) =.0323 Thus, the margin of error will be 2.575 * .0323 = .083 on eitherside of the mean.

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