Question

Waste Today Services operates a garbage hauling company in a South Jersey city. Each year, the company must apply for a new contract with the city. The contract is in part based on the pounds of garbage hauled. Part of the analysis that goes into the contract development is an estimate of the mean pound of garbage put out by each customer in the city. The city has asked for both 99% and 90% confidence interval estimates for the mean. A sample of 100 customers was taken. It is known that the population standard deviation is 12.6 pounds and the sample mean is 40.78. What is the impact in changing the confidence level?

Answer 1

Use confidence interval formulas:

CI99 = mean ± (2.58)(sd/√n)
...where mean = 40.78; 2.58 represents 99% interval; sd = 12.6; n = 100.

Calculate the interval.

Use the formula again for a 90% confidence interval using the appropriate value from a z-table.

Once you calculate both intervals, you should be able to see the difference.

I hope this will help get you started.