Question

Anystate Auto Insurance Company took a random sample of 354 insurance claims paid out during a 1-year period. The average claim paid was $1595. Assume σ = $254. Find a 0.90 confidence interval for the mean claim payment. (Round your answers to two decimal places.) lower limit $ upper limit $ Find a 0.99 confidence interval for the mean claim payment. (Round your answers to two decimal places.) lower limit $ upper limit $

Answer 1

z value at 90% = 1.645

CI = 1595 +/- 1.645 *(254/sqrt(354))
= (1572.79,1617.21)

Lower limit = 1572.79
Upper limit = 1617.21

z value at 99% = 2.576

CI = 1595 +/- 2.576 *(254/sqrt(354))
= (1560.22,1629.78)

Lower limit = 1560.22
Upper limit = 1629.78