Suppose that Randy is an analyst for the bicyling industry and wants to estimate

Question

Suppose that Randy is an analyst for the bicyling industry and wants to estimate the asking price of used entry-level road bikes advertised online in the southeastern part of the United States. He obtains a random sample of n=14 online advertisements of entry-level road bikes. He determines that the mean price for these 14 bikes is x=$714.19 and that the sample standard deviation is s=$184.56. He uses this information to construct a 99% confidence interval for , the mean price of a used road bike. What is the lower limit of this confidence interval? Please give your answer to the nearest cent. What is the upper limit of this confidence interval? Please give your answer to the nearest cent.

Explanation / Answer

mean is 714.19 and s is 184.56

for sample size of 14, the standard error is SE=s/sqrt(N)=184.56/sqrt(14)=49.3257

z for 99% confidence is 2.576

thus lower bound is mean-SE*z=714.19-2.576*49.3257=587.12699

upper bound is mean+SE*z=714.19+2.576*49.3257=841.253

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