The personal of a large department corporation wants to estimate the family dent

Question

The personal of a large department corporation wants to estimate the family dental expenses of its employees to determine the feasibility of providing a dental insurance plan. A random sample of 12 employees reveals the following dental expenses (in dollars) for the preceding year: 110, 362, 246, 90, 410, 208, 173, 425, 316, 179, 280, 290

3. set up a 95% Confidence interval estimate of the avarage famly dental expenses for all employees of this coorporation. What happen when we increase the confidence level?
4. if we believe that the margin of error is quite large in part 3, what shall we do to improve our estimations results? provide two options

Explanation / Answer

3. t table value for 11 df at 95% CI is 2.201

Using online calculator we get mean=257.42 and sd=109.92

So Margin of Error=t*sd/sqrt(n)=69.84

Hence CI=mean+/-E=257.42+/-69.84=(187.58,327.26)

If you increase the confidence level width of the interval increases.

4. We need to remove outliers, as if we remove outliers sd will decrease and so E will.

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