Question

1. You want to purchase Pepsi 12 packs for Thanksgiving Dinner. The average price of the 12 pack is $6.98 with a standard deviation of $1.03. Calculate the appropriate sample size where you want to be 90% confident in your results and be within a margin of error of $.25 on the price of 12 packs.

Answer 1

Solution :

Given that,

standard deviation = $\sigma$ =1.03

margin of error = E = 0.25

At 90% confidence level the z is ,

$\alpha$ = 1 - 90% = 1 - 0.90 = 0.10

$\alpha$ / 2 = 0.10 / 2 = 0.05

Z_$\alpha$/2 = Z_0.05 = 1.645

Sample size = n = ((Z_$\alpha$/2 * $\sigma$ ) / E)²

= ((1.645 * 1.03) / 50.25)²

= 46

Sample size = 46