The following data represent the asking price of a simple random sample of homes

Question

The following data represent the asking price of a simple random sample of homes for sale construct 99%confidence interval with and without the outlier included comment on the effect the outlier has on the confidence interval Construct a 99% confidence interval with the outer included Construct a 99% confidence interval with the outlier removed Comment on the effect the outlier has on the confidence interval The outlier caused the width of the confidence interval to increase The outlier caused the width of the confidence interval to decrease The outlier had no effect on the width the confidence interval.

Explanation / Answer

kindly see if the figures are accurate as per above given data

for (n-1=11) degree of freedom and 99% CI, t =3.1058

hence confidence interval =mean +/- t*std error =160385 ; 313215

b)here 459000 is outlier as it lies outside 1.5 IQR from upper interval

hence without outlier

degree of freedom =10

here for 10 degree of freedom; t=3.1693

hence confidence interval=mean +/- t*std error =167833 ; 265367

c)the outlier casued the width of the confidence interval to increase.

t Disrtibution S. No X 1 294000 2 143000 3 459000 4 179900 5 279900 6 205800 7 208900 8 147800 9 219900 10 251000 11 187500 12 264900 mean(X) 236800.000 std deviation(S) 85230.223 std error =S/(n)1/2 24603.846

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