ESTIMATIO

N
OF
Parameters
POINT ESTIMATE is a value intended to match some parameter
of a population.

INTERVAL ESTIMATE is a range of possible values within which a

population parameter is expected to lie.

The CONFIDENCE LEVEL (1-a) indicates the level certainty

that accompanies the smapling method used to select a sample
from a population.

The MARGIN OF ERROR, often written asε , is the maximum

expectes absolute difference between the true population
parameter and sample statistic.
HOW TO COMPUTE THE MARGIN
OF ERROR ε
Population standard deviation is known (σ
is known)

σ_x̄ = σ/√n
 CRITICAL Zα/2
VALUE
The critical value Zα/2 is the standard
normal curve that the area under the
curve to the right of z is a/2.
INTERVAL
ESTIMATE
x̄ - ε <μ<x̄ + ε
FOR
POPULATION μ = x̄ ± ε
MEAN
 A manufacturing company
Example: makes LED light bulb whose
Finding the length of life is normally
interval distributed with a standard
deviation of 40 hours. If a
estimate for random sample of 36 bulbs is
μ with found to have an average life of
known σ 780 hours and the level of
confidence is 95%.
 a. Find the standard error
b. Compute the value of a and
Example: indicate the region under the standard
Finding the normal curve that represents the level

interval of confidence and the regions with are

a/2.
estimate for c. Find the critical number z_a/2.
μ with d, Find the margin of error
e. Find the interval estimate of μ at
known σ 95% level of confidence.
HOW TO COMPUTE THE MARGIN
OF ERRORε
Population standard deviation is unknown
(σ is unknown)

ε = z_a/2 (s/√n
 A survey is done to find the mean general

Example: weighted average (GWA) of students

after one semester of schooling as
Finding the freshman in a university. A random

interval sample of 36 students is chosen, their

grades are collected. The mean GWA is
estimate for 2.26 with standard deviation of 0.3.
μ with Assume that the probability distribution
of GWA is approximately normal. If the
unknown σ level of confidence chosen is 99%, find
the ff:
 a. standard error
Example: b. critical number
c. margin of error
Finding the d. interval estimate for μ
interval e. lenght L of the confidence interval
estimate for
μ with
unknown σ