Question

A survey was taken of U.S. companies that do business with firms in India. One of the questions on the survey was: Approximately how many years has your company been trading with firms in India? A random sample of 44 responses to this question yielded a mean of 10.455 years. Suppose the population standard deviation is 7.7 years and the confidence level is 90% :

1. What is the point estimate?                  
2. What is the margin of error?                  
3. Develop interval estimation for the mean number of years that a US company has been trading in India

Answer 1

A) The point estimate is $\bar x$ = 10.455

B) At 90% confidence interval the critical value is z_0.05 = 1.645

Margin of error = z_0.05 * $\sigma/\sqrt n$

= 1.645 * 7.7/$\sqrt 44$

= 1.9095

C) The 90% confidence interval for population mean is

$\bar x$ +/- ME

= 10.455 +/- 1.9095

= 8.5455, 12.3645