As the automobile accident rate increases, insurers are forced to increase their

Question

As the automobile accident rate increases, insurers are forced to increase their premium rates. Companies such as Allstate have recently been running a campaign they hope will result in fewer accidents by their policyholders. For each six-month period that a customer goes without an accident, Allstate will reduce the customer’s premium rate by a certain percentage. Companies like Allstate have reason to be concerned about driving habits, based on a survey conducted by Volvo of North America, in which 1,100 drivers were surveyed.   Among those surveyed, 74% said that careless or aggressive driving was the biggest threat on the road. One-third of respondents said that cell phone usage by other drivers was the driving behavior that annoyed them the most.

     Based on these data, assuming that the sample was a simple random sample, construct and interpret a 95% confidence interval estimate for the true proportion in the population of all drivers who are annoyed by cell phone users.

Explanation / Answer

given n=1100

p=0.74

95% Confidence interval for P is

where p=0.74 and z=1.96 and n=1100

Hence 95% CI for P is

(0.7141, 0.7659)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.