Answer to Question #217129 in Statistics and Probability for JITENDAR SINGH

Question

 Discount Sounds has 260 retail outlets through out the US. The firm is evaluating a potential location for a new outlet, based in part on the mean annual income of individuals who live in the surrounding area and who are, therefore, potential customers.

Answer 1

We know that the margin of the error $=z_{\alpha/2}\frac{(\sigma)}{\sqrt{n}}$

$=\frac{1.96\times 4500}{\sqrt{36}}$

$=1.96\times 750$

$=1470$

Interval estimate of $\mu =\$31000\pm 1470$

Hence, $\$ 29630$ to the $\$32570$