As a first step, the store seeks to estimate the percentage of pricing errors. T

Question

As a first step, the store seeks to estimate the percentage of pricing errors. The internal auditors take a simple random sample of 26 line items from their inventory of 10,000 line items. The percentage of overpriced items in the sample is 0%, and the percentage of underpriced items in the sample is 7.7%.

A conservative 62% confidence interval for the percentage of line items in the store that are priced incorrectly would extend from (Q21)_____?(low) to (Q22)____? (high).

I would really like help with this question, what I have currently done is I've tried to calculate p which gave me .0029, then I plugged it into the formula k= (1/(1-p))^1/2 but I really don't think I'm doing this correctly because my values seem very off.

Explanation / Answer

conservative approach

n = 26

p = 0.5

z= 1.0

standard error = sqrt( 0.5 * 0.5/26) = 0.098

lower bound = 0.5 -0.098 = 0.402

upper bound = 0.5 + 0.098 = 0.598

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