I am trying to figure out to do hypothesis testing.... Last weeks assignment I h

Question

I am trying to figure out to do hypothesis testing.... Last weeks assignment I had gotten wrong it was on sample populations.

A partner company to Universal Credit Inc., would like to examine the required sample size needed to be able to estimate the mean dollars that each card holder will spend each month. It would like to be within plus or minus $10 of the true mean with a 98% confidence level. The standard deviation is thought to be $500. How many card holders should be sampled?

Then I have to provide a two tailed hypothesis with a null statement. Please help

Explanation / Answer

Margin of Error (half of confidence interval) = 10
The margin of error is defined as the "radius" (or half the width) of a confidence interval for a particular statistic.
Level of Confidence = 98
s: Sample standard deviation = 500
('z critical value') from Look-up Table for 98% = 2.33

significant digits = 2

Margin of Error = ('z critical value') * s/SQRT(n)
n = Sample Size

Algebraic solution for n:
n =[('z critical value') * s/Margin of Error]^2
= [ (2.33 * 500)/10 ]^2

Sample Size = 13573

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