Question

In a random sample of 100 audited estate tax returns, it was determined that the mean amount of additional tax owed was $3432 with a standard deviation of $2588. Construct and interpret a 90% confidence interval for the mean additional amount of tax owed for estate tax returns. Click the icon to view the t-distribution table. The lower bound is $ (Round to the nearest dollar as needed.)

Answer 1

Sample mean = 3 = 3432 Sample size = n = 100 Sample S.D = s = 2588 Standard Error = s/Vn = 2588/V100 = 258.8 Confidence Level = 90 Significance Level = a = (100-90)% = 0.1 Degrees of freedom = n-1 = 100-1 = 99 Critical value = t* = 1.66 [using Excel =TINV(0.1,99) ] Margin of Error = t*(s/Vn )= 1.66*258.8 = 429.6 Lower Limit = 3 - Margin of Error = 3432 -429.6 = 3002 Upper Limit = ☆ + Margin of Error = 3432 + 429.6 = 3862