The Wall Street Journal reported that automobile crashes cost the United States

Question

The Wall Street Journal reported that automobile crashes cost the United States $162 billion annually (The Wall Street Journal, March 5, 2008). The average cost per person for crashes in the Tampa, Florida, area was reported to be $1599. Suppose this average cost was based on a sample of 50 persons who had been involved in car crashes and that the population standard deviation is = $600. What is the margin of error for a 95% confidence interval (to 2 decimals)? 166.31 What is the margin of error for a 85% confidence interval (to 2 decimals)? What is the margin of error for a 75% confidence interval (to 2 decimals)?

Explanation / Answer

What is the margin of error for a 95% confidence interval (to 2 decimals)?alpha / 2 = 0.025

margin of error : 1.96 * 600 / srqt (50) = 166.31

margin of error for 85%   alpha / 2= 0.075   Z= 1.44

margin of error : 1.44 * 600 / srqt (50) = 122.188

75%   alpha / 2 = 0.125 Z=1.15

margin of error : 1.15 * 600 / srqt 50 = 97.58

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