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light years.

than the planet Jupiter as the Earth

Confidence interval

♦ A confidence interval gives an estimated range of values,

which is likely to include an unknown population

parameter, the estimated range being calculated from a given

set of sample data.

percentage is 95%, but we can produce 90%, 99%, 99.9%,

confidence intervals for the unknown parameter.

♦ Confidence limits are the lower and upper boundaries of a

confidence interval, i.e., the values which define the range of a

confidence interval.

Example:

• Suppose an opinion poll predicted that, if the election were

vote.

plus or minus 3%.

Conservative Party would get between 57% and 63% of the

total vote.

Pr (57 % < µ < 63 %) = 0.95

x ± z (1 -- α )/2 * (σ / √ n)

sample mean = 23.4, σ = 0.3, n=36

⇒ The confidence limits are a and b

⇒ The confidence limits are

µ = x ± z (1 -- α )/2 * (σ / √ n)

µ = x ± z (1 -- 0.99)/2 * (σ / √ n)

µ = x ± 0.129

= (23.271, 23.529)

That is, 99% of time the population mean is likely to lie in the

interval (23.271, 23.529).

That is, Pr (23.27121 < µ < 23.52879) = 0.99

2. Find a ‘94 % Confidence Interval’ of population mean,

given sample mean = population variance = 4, n=36.

Research case study.

Strength Strength

Females 17 5.353 2.743

Males 17 3.882 2.985

• As you can see, the females are stronger than the males.

and the male mean of 3.88 is 1.47

• However, the gender difference in this particular sample is

not very important. What is important is the difference in the

population.

difference in population means. The precision of the

estimate is revealed by a confidence interval.

= ( x1 – x2 ) ± z (1 -- α )/2 * (σ / √ n)

= 0.5805

p (1 − p )

p ± zα / 2

n

p is the sample proportion

ray machines that malfunction and produce excess radiation.

A random sample of 40 machines is taken and 12 of the

machines malfunction.

The problem is to compute the 95% confidence interval on P, the

proportion that malfunction in the population.

The value of p is 12/40 = 0.30

Upper limit = .30 + (1.96)(.072) = 0.44.

The confidence interval is: (0.16, 0.44)

Confidence interval on the difference between proportions

p1 - p2 is used as an estimate of π1 − π2.

The standard error is:

=

= .067

Question 1:

Discount Sounds has 260 retail outlets throughout the United States. The firm is evaluating a potential

location for a new outlet, based in part, on the mean annual income of the individuals in the marketing area

of the new location.

A sample of size n = 36 was taken; the sample mean income is $31,100. The population is not believed to

be highly skewed. The population standard deviation is estimated to be $4,500, and the confidence

coefficient to be used in the interval estimate is .95.

Question 2:

Based on sample size 50, find the ’96.4 % Confidence Interval’ of population mean, given sample mean = --

0.02, σ2 = 0.0025.

Question 3:

Find a ‘99 % Confidence Interval’ of population mean, given sample

mean = 23.4, σ = 0.3, n=36.

Solution:

Let the confidence limits be a and b.

⇒ Pr (a < µ < b) = 0.99

σ/√n σ/√n σ/√n

Now, X ~ N (µ, σ 2 )

⇒ Xmean ~ N (µ, σ 2 / n)

⇒ (Xmean - µ) / [σ/√n] ~ N (0, 1)

σ/√n σ/√n

= xmean ± 0.129

= (23.271, 23.529)

That is, 99% of time the population mean is likely to lie in the interval

(23.271, 23.529).

That is, Pr (23.27121 < µ < 23.52879) = 0.99

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