SOLUTION: A well-known bank credit card firm wishes to estimate the proportion of credit card holders who carry a nonzero balance at the end of the month and incur an interest charge. Assume

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Question 1025889: A well-known bank credit card firm wishes to estimate the proportion of credit card holders who carry a nonzero balance at the end of the month and incur an interest charge. Assume that the desire margin of error is 0.03 at 98% confidence.
a) How large a sample should be selected if it is anticipated that roughly 70% of the firm’s card holders carry a nonzero balance at the end of the month?
b) How large a sample should be selected if no planning value for the proportion could be specified?
Answers:
a) 1267
b) 1509
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
A well-known bank credit card firm wishes to estimate the proportion of credit card holders who carry a nonzero balance at the end of the month and incur an interest charge. Assume that the desire margin of error is 0.03 at 98% confidence.
a) How large a sample should be selected if it is anticipated that roughly 70% of the firm’s card holders carry a nonzero balance at the end of the month?
n = [2.3263/0.03]*0.7*0.3
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b) How large a sample should be selected if no planning value for the proportion could be specified?
n = [2.3263/0.03]*(1/2)^2
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Cheers,
Stan H.
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Answers:
a) 1267
b) 1509