$232,000 $279,900 $219,900 $143,000 $205,800 $180,500 $459,900 $260,900 $187,500
ID: 3218345 • Letter: #
Question
$232,000
$279,900
$219,900
$143,000
$205,800
$180,500
$459,900
$260,900
$187,500
$244,900
$147,800
$264,900
The following data represent the asking price of a simple random sample of homes for sale. Assume that we are sampling from a normal population. Construct a 99% confidence interval for the population average asking price with and without the outlier included. Comment on the effect the outlier has on the confidence interval. Do not forget to click on the double rectangle icon to open the data in StatCrunch for your summary statistics.$232,000
$279,900
$219,900
$143,000
$205,800
$180,500
$459,900
$260,900
$187,500
$244,900
$147,800
$264,900
Explanation / Answer
Confidence Interval
CI = x ± t a/2 * (sd/ Sqrt(n))
Where,
x = Mean
sd = Standard Deviation
a = 1 - (Confidence Level/100)
ta/2 = t-table value
CI = Confidence Interval
Mean(x)=255950
Standard deviation( sd )=33870.4148
Sample Size(n)=12
Confidence Interval = [ 255950 ± t a/2 ( 33870.4148/ Sqrt ( 12) ) ]
= [ 255950 - 3.106 * (9777.547) , 255950 + 3.106 * (9777.547) ]
= [ 225580.94,286319.06 ]
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