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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