SOLUTION: 9.2 #17 The following data represent the asking price of a simple random sample of homes for sale. Construct a 99​% confidence interval with and without the outlier included

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Question 1077782: 9.2 #17
The following data represent the asking price of a simple random sample of homes for sale. Construct a 99​% confidence interval with and without the outlier included. Comment on the effect the outlier has on the confidence interval
​$296,500
​$279,900
​$219,900
$143,000
​$205,800
​$249,000
$459,900
​$273,500
​$187,500
$178,500
​$147,800
​$264,900



a) Construct a 99​% confidence interval with the outlier included.
b)Construct a 99​% confidence interval with the outlier removed.

Answer by Boreal(15235)   (Show Source): You can put this solution on YOUR website!
t df=12,0.995=3.106
t df=11,0.995=3.17
mean +/- s/sqrt(n)
a. 242184+/-3.106*85773/sqrt(12)=
(165281, 319085)
b. 223909+/- 3.17*54054/sqrt (11)=
(172257, 275561)
The mean is a little less, as expected. The confidence interval is about 2/3 as wide, due to less variability.

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