Question

The average cost per night of a hotel room in New York City is $273 (SmartMoney, March 2009). Assume this estimate is based on a sample of 45 hotels and that the sample standard deviation is $65.
a. With 95% confidence, what is the margin of error (to 2 decimals)?

b. What is the 95% confidence interval estimate of the population mean?
( , )

Answer 1

Part a)
ME = 1.96 * sd/√n

With your data:

ME = 1.96 * 65/√45

Part b)
CI95 = mean ± 1.96(sd/n)

With your data:

CI95 = 273 ± 1.96(65/√45)

I'll let you finish the calculations.