Dr. Mack Lemore, an expert in consumer behavior, wants to estimate the average a

Question

Dr. Mack Lemore, an expert in consumer behavior, wants to estimate the average amount of money that people spend in thrift shops. He takes a small sample of 8 individuals and asks them to report how much money they had in their pockets the last time they went shopping at a thrift store. Here are the data: 28, 23, 25, 21,15, 29, 24, 26. Find the upper bound of a 95% confidence interval for the true mean amount of money individuals carry with them to thrift stores, to two decimal places. Take all calculations toward the final answer to three decimal places.

Explanation / Answer

Upper bound for 95% confidence interval will be :

= Sample mean + t * S / n0.5

Sample mean = Sum of all the values / number of values = 191 / 8 = 23.875

S = Standard deviation = 4.422

t = t0.025,n-1 = t0.025,7 = 2.8412

Upper bound = 23.875 + 2.8412 * ( 4.422 / 80.5 ) = 28.32

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