The following data represent the asking price of a simple random sample of homes

Question

The following data represent the asking price of a simple random sample of homes for sale. Construct a gg% the outier has on the confidence interval Click the icon to view the table of areas under the t-distribution. (a) Construct a 996 confidence interval with the outlier included. (Round to the nearest integer as needed ) (b) Construct a 99% confidence interval with the outlier removed. Round to the nearest integer as needed.) (c) Comment on the effect the outlier has on the confidence interval. O The outlier had no effect on the width of the confidence interval. O The outlier caused the width of the confidence interval to increase. O The outlier caused the width of the confidenoe interval to decrease.

Explanation / Answer

given sample 204900,143000,459900,230900,279900,205800,204500,147800,219900,196000,187500,264900

mean with outlier =228750   , standard devaition =83011.549032212

mean without outlier =207736.36363636 , standard devaition = 41847.897742354

       

t df=11,0.01=3.106
t df=10,0.01=3.17
mean +/- t *s/sqrt(n)

    with outlier 228750+/- 3.106*83011.549032212/sqrt(12)

                     =228750+/- 74430.22749

                      =                     154320,303180

     without outlier

                       =207736.36363636+/- 3.17*41847.897742354/sqrt(11)

                        =207736.36363636 +/- 39997.84245

                        =167739,247734

The outlier caused the width of the confidence interval to increase

                  

             

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