The average cost per night of a hotel room in New York City is $260 (SmartMoney,

Question

The average cost per night of a hotel room in New York City is $260 (SmartMoney, March 2009). Assume this estimate is based on a sample of 45 hotels and that the sample standard deviation is $50 a. with 95% confidence, what is the margin of error? Round your answer to the nearest dollar. b. what is the 95% confidence interval estimate of the population mean? Round your answers to the nearest dollar. to c. Two years ago the average cost of a hotel room in New York City was $229. Discuss the change in cost over the two-year period - Select your answer

Explanation / Answer

Ans:

Given that

mean=260

sample standard deviation=50

sample size,n=45

As,n>=30,we can use z distribution.

z value for 95% CI is 2

a)Margin of error=2*50/sqrt(45)=15

b)95% confidence interval estimate of true mean

=260+/-15

=(245, 275)

c)As,229 is not included in the above confidence interval,it means that average cost of hotel room has changed over last 2 years.

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