SOLUTION: A car insurance company would like to estimate the proportion of accident claims covered by the company. According to the preliminary estimate,89% of the claims are covered. How la
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Question 324568: A car insurance company would like to estimate the proportion of accident claims covered by the company. According to the preliminary estimate,89% of the claims are covered. How large of a sample should be taken to estimate the proportion covered by the company if we want to be 95% confident that the sample percentage is within 3% of the actual percentage of the accident covered by the company Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! A car insurance company would like to estimate the proportion of accident claims covered by the company. According to the preliminary estimate,89% of the claims are covered. How large of a sample should be taken to estimate the proportion covered by the company if we want to be 95% confident that the sample percentage is within 3% of the actual percentage of the accident covered by the company
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Since E = z*sqrt(pq/n)
sqrt(n) = [z/E]sqrt(pq)
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n = [z/E]^2*(pq)
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Your Problem:
n = [1.96/0.03]^2*(0.89*0.11)
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n = [4268]*(0.0979)
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n = 418 when rounded up
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Cheers,
Stan H.
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