Test 2 Form C (Chapter 8) 100 Points Date 1. Costs are rising for all kinds of m

Question

Test 2 Form C (Chapter 8) 100 Points Date 1. Costs are rising for all kinds of medical care. The mean monthly rent at assisted-living f acilities was reported to have increased 18% over the last five years to $3,686 (The wall Street Jo 27, 2012). Assume this cost estimate is based on a sample of 125 facilities. From past Be assumed that the population standard deviation is 625. urnal, October studies, it can Find a 95% confidence interval estimate of the mean monthly rent at assisted-living facilities. a) What is the best point-estimate of the population mean rent? (4 points) b) Find the critical value. (4 points) c) Find the margin of error. (4 points) d) Find the confidence interval. (4 points) e) Interpret the confidence interval. (4 points)

Explanation / Answer

Solution1:a:

here it is given sample mean=3686

for sample siz=n=125

large sample folllows normal distribution.

best population mean rent=sample mean

according to central limit therorem.

Solution1b:

z crit for 95%=1,96

Solution1c:

margin of error=z(population stddev/sqrt(sample size)

=1.96*625/sqrt(125)

=109.567

Solutiond:

95% confidence inetravl for true mean

sample mean-margin of error and sample mean+margin of error

3686-109.567 and3686+ 109.567

3576.433 and 3795.567

lower limit=3576.433

and upper limit=3795.567

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