A major brand credit card firm is interested in estimating a Proportion of its c

Question

A major brand credit card firm is interested in estimating a Proportion of its credit card holders that carry a non-zero balance at the end of the month and incur an interest charge. A firm wants this estimate to be to within 3% with 98% Confidence. What is a minimum required Sample size for estimating a Proportion of credit card holders with non-zero balance at the end of the month if, according to current firm's records, 70% of its credit card holders carry a non-zero balance at the end of the month? 632 credit card holders 807 credit card holders 1, 263 credit card holders None of the above What is a minimum required Sample size for estimating a Proportion of credit card holders with non-zero balance at the end of the month if no estimate of a Sample proportion is available? 1, 0368 credit card holders 1, 503 credit card holders 752 credit card holders None of the above

Explanation / Answer

1) here p=0.7

margin of error E =0.03

for 98% CI, z=2.326

hence sample size n=p(1-p)*(Z/E)2 =1263

2) for no estimate p=0.5

hence sample size n=p(1-p)*(Z/E)2 =1503

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