An economist would like to estimate a 99% confidence interval for the average re

Question

An economist would like to estimate a 99% confidence interval for the average real estate taxes collected by a small town in California. In a prior analysis, the standard deviation of real estate taxes was reported as $1,470. Use Table 1.

What is the minimum sample size required by the economist if he wants to restrict the margin of error to $510? (Round intermediate calculations to 4 decimal places and "z-value" to 3 decimal places. Round up your answer to the nearest whole number.)

An economist would like to estimate a 99% confidence interval for the average real estate taxes collected by a small town in California. In a prior analysis, the standard deviation of real estate taxes was reported as $1,470. Use Table 1.

Explanation / Answer

Z for 99% confidence interval = Z0.995 = 2.575

Margin of error = Z0.995 * sd/ sqrt (n)

Or, 510 = 2.575 * 1470 / sqrt (n)

Or, n = 55.1

Or, n = 56

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