Use the information given in Example 20.1 to determine the size of the sample if you want a level of precision of

Example 20.1

Simple Random Sampling to Determine Household Income. Suppose an investment adviser is trying to decide whether a small retirement community consisting of 1,000 residents represents a promising source of potential clients. To determine the potential business, the investment adviser decides to analyze the size of the residents’ investment portfolios. A random sample of 75 residents, who were able to respond anonymously, produces a sample mean of $375,000 with a sample standard deviation of $120,000.
We can use this information to construct a 95 % confidence interval for the mean value of the investment portfolio:

Transcribed Image Text:

= $12,000.