A confidence interval, at the 95% confidence level, will be used to answer the question, "What is the mean annual salary (in US dollars) of a Tesla car owner?" Data was collected from 36 Tesla owners across the US. The mean annual salary of those 36 Tesla owners was $289000 with a standard deviation of $1342.

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Business

Ruben

20 February, 16:50

A confidence interval, at the 95% confidence level, will be used to answer the question, "What is the mean annual salary (in US dollars) of a Tesla car owner?" Data was collected from 36 Tesla owners across the US. The mean annual salary of those 36 Tesla owners was $289000 with a standard deviation of $1342.

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Eddie Johnston · Answer 1

The answer to the question is given below in the explanation section

Explanation:

From the question we recall the following

The mean: this is the the value at the center of the confidence interval which represents the quantity.

let Z * denotes when building the confidence level

]The mean = 289000, n = 36, standard deviation = 1342

Z * for 95% Confidence Interval = 1.96

The margin of error = 1.96*[1342/√ (36) ] = 438.39

The 95% Confidence Interval is given by:

Lower CI = Mean - Margin of error = 289000 - 438.39 = 288561.61

Upper CI = Mean + Margin of error = 289000 + 438.39 = 289438.39

When the sample is decreased to 20 Tesla owners, the confidence interval widens.