Ford provides an option of a sunroof and side air bag package for its Windstar model. This package costs$1400. Ford wants todetermine the percentage of Windstar buyers who would pay $1400 extra for the sunroof and side air bags. How many Windstar buyers must be surveyed if we want to be 95% confident that the sample percentage is within four percentage points of the true percentage for all Windstar buyers

Answers

Answer 1

Answer:

601 buyers must be surveyed.

Step-by-step explanation:

In a sample with a number n of people surveyed with a probability of a success of [tex]\pi[/tex], and a confidence level of [tex]1-\alpha[/tex], we have the following confidence interval of proportions.

[tex]\pi \pm z\sqrt{\frac{\pi(1-\pi)}{n}}[/tex]

In which

z is the zscore that has a pvalue of [tex]1 - \frac{\alpha}{2}[/tex].

The margin of error is:

[tex]M = z\sqrt{\frac{\pi(1-\pi)}{n}}[/tex]

95% confidence level

So [tex]\alpha = 0.05[/tex], z is the value of Z that has a pvalue of [tex]1 - \frac{0.05}{2} = 0.975[/tex], so [tex]Z = 1.96[/tex].

How many Windstar buyers must be surveyed if we want to be 95% confident that the sample percentage is within four percentage points of the true percentage for all Windstar buyers?

We need to survey n buyers. n is found when [tex]M = 0.04[/tex]. We dont have an estimate for the proportion, so we use [tex]\pi = 0.5[/tex], which is when the largest sample will be needed.

[tex]M = z\sqrt{\frac{\pi(1-\pi)}{n}}[/tex]

[tex]0.04 = 1.96\sqrt{\frac{0.5*0.5}{n}}[/tex]

[tex]0.04\sqrt{n} = 1.96*0.5[/tex]

[tex]\sqrt{n} = \frac{1.96*0.5}{0.04}[/tex]

[tex](\sqrt{n})^2 = (\frac{1.96*0.5}{0.04})^2[/tex]

[tex]n = 600.3[/tex]

Rounding up

601 buyers must be surveyed.


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Answers

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Answers

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---

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