SOLUTION: You have 12 collected prices for a text book (assume that the prices are normally distributed) from various websites and found mean = $114 and standard deviation of $4.75. Based on

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Question 764808: You have 12 collected prices for a text book (assume that the prices are normally distributed) from various websites and found mean = $114 and standard deviation of $4.75. Based on a 90% confidence interval for the population mean, can you say that the $107 you paid for a good copy of the book was about the average cost of the text book or a bargain? Why?
Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website!
You have 12 collected prices for a text book (assume that the prices are normally distributed) from various websites and found mean = $114 and standard deviation of $4.75. Based on a 90% confidence interval for the population mean, can you say that the $107 you paid for a good copy of the book was about the average cost of the text book or a bargain? Why?
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sample mean = x-bar = 114
ME = 1.645*4.75/sqrt(11) = 2.3559
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90% CI: 114-2.36 < u < 114+2.36
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90% CI: 111.64 < u < 116.36
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Comment:: You can be 90% confident that $107 is lower than
an average price for the text book.
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Cheers,
Stan H.