Reply
Mon 20 Oct, 2014 02:40 pm
4. The banking industry has suffered in recent years because of a high default rate on mortgage and consumer loans. How large a sample must be taken from banking records to be 98% confident that the estimate for the amount of these defaults is within $1000 of the true mean loan amount? Assume the population standard deviation is $10,000.
@blackleg33,
1) Look up the z factor for 98% confidence interval.
2) The formula is Z = sigma/sqrt(n). You know sigma (standard deviation) and Z (just looked it up) so solve for N (sample size).
Stumble It!
Tweet This
Bookmark on Delicious
Share on Facebook
Share on MySpace