Confidence interval Madhab Bhatta

Problems on Confidence Interval for Mean:

1. IF sample mean = 85,  = 8, and n = 64, set up a 95% confidence interval estimate for the
population mean µ.
2. The quality control manager at a light bulb factory needs to estimate the mean life of a
large shipment of life bulbs. The process standard deviation is known to be 100 hours. A
random sample of 64 light bulbs indicated a sample mean life of 350 hours.
a. Obtain the standard error of the mean.
b. Set up a 95% confidence interval estimate of the true population mean life of light
bulbs in this shipment[325.5,374.5]
c. Do you think that the manufacture has the right to state that the light bulb last an
average of 400 hours?
3. The Kathmandu High School nurse is interested in knowing the average height of seniors
at this school, but she does not have enough time to examine the records of all 430
seniors. She randomly selects 48 students. She finds the sample mean to be 64.5 inches
and the standard deviation to be 2.3 inches.
a) Find the estimated standard error of the mean.
b) Construct a 96% confidence interval for the mean. (PU)
4. It is known from the manufacturer’s specifications that the standard deviation of the
amount of paint is equal to 0.02 gallon. A random sample of 50 cans is selected, and the
sample mean amount of paint per 1-gallon is 0.995 gallon.
a. Obtain the standard error of the mean.
b. Set up 95% confidence interval estimate of the true population mean amount of
paint included in a 1-gallon.
5. The bottling plant has informed the inspection division that the s.d. for 2- liter bottles is
0.05 liter. A random sample of 100 2-liter bottles obtained from this bottling plant
indicates a sample mean of 1.99 liters. Set up a 95% confidence interval estimate for true
population mean amount of soft drink in each bottle.
6. If sample mean = 75, s = 24, and n = 36, and assuming that the population is normally
distributed, ser up a 95% confidence interval estimate for the population mean µ.
7. Set up a 95% confidence interval estimate for the population mean, based on each of the
following sets of data separately, assuming that the population is normally distributed:
Set 1: 1 1 1 1 8 8 8 8
Set 2: 1 2 3 4 5 6 7 8
8. A manufacture of computer paper has a production process that operates continuously
throughout an entire production shift. The paper is expected to have an average length of
11 inches and the standard deviation is known to be 0.02 inch. Suppose a random sample
of 100 sheets and the average paper length is found to be 10.998 inches. Set up 95% and
99% confidence interval estimate of the population average paper length.(Ans-
10.99408<μ<11.00192)
9. The customer service department of a local gas utility wants to estimate the average
length of time between the entry of the service request and the connection of service. A
random sample of 15 houses is selected from the records available during the past year.
The results records in number of days are as follows
86 78 96 73 99 78 72 104 114 137 126 117
114 103 86
Set up 95% and 99% confidence interval estimate of the population average waiting time
in the past year.

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Confidence interval Madhab Bhatta

10. A stationary shop would like to estimate the average retail value of greeting cards that it
has in its inventory. A random sample of 20 greeting cards indicated an average value of
Rs.167 and a standard deviation of Rs.32. Set up a 95% confidence interval estimate of
all greeting cards that are in its inventory.
11. Population consists of the Fortune 500 Companies (Fortune Web Site), as ranked by
Revenues. You are trying to find out the average Revenues for the companies on the list.
The population standard deviation is $ 15,056.37. A random sample of 64 companies
obtained a sample mean of $ 10,672.87. Give a 90% confidence interval estimate for the
average Revenues.
12. A race car driver tested his car for time from 0 to 60 mph, and in 20 testes obtained an
average of 4.85 seconds with a standard deviation of 1.47 seconds. Calculate a 95%
confidence interval for the time from 0 to 60 mph.
13. Quality control engineer is interested in the mean length of sheet insulation being cut
automatically by machine. The desired length of the insulation is 12 feet. It is known that
the standard deviation in the cutting length is 0.15 feet. A sample of 70 cut sheets yields a
mean length of 12.14 feet. This sample will be used to obtain a 94%, 95% and 99%
confidence interval estimate for the mean length cut by machine. Obtain and interpret this
confidence interval.
14. A rational consumer is smart enough to conduct statistical analysis. He was worried about
DDC’S average filling of milk in a packet labeled. 500 ml net. He randomly sampled 10
such different packets and found the sample mean of 495 ml with a sample standard
deviation (s) of 9. Set up a 95% confidence interval of the population mean µ.
15. A major department store chain is interested in estimating the average amount its credit
card customers spent on their first visit to the chain’s new store in the mall. Fifteen credit
card accounts were randomly sampled and analyzed with the following results, sample
mean= $50.50 and s2 = 400. Construct a 95% confidence interval for the average amount
its credit card customers spent on their first visit to the chain’s new store in the mall,
assuming that the amount spent follows a normal distribution.
Confidence Interval for Proportion:
1. If n = 200 and X = 50, set up a 95% confidence interval estimate of the population
proportion.
2. A random sample of 500 apples was taken from a large consignment and 60 were found
be bad. Obtain the 95% confidence limits for the proportion of bad apples in the
consignments.
3. A random sample of 100 consumers is obtained, and it is found that 34 people in the
sample are users of foreign made products the rest are users of domestic products. Obtain
95% confidence interval estimate for the domestic product users.
4. The telephone company wants to estimate the proportion of households that would
purchases an additional telephone line if it were made available at a substantially reduced
installation cost. A random sample of 500 households is selected. The results indicate that
135 of the households would purchase the additional telephone line at a reduced
installation cost. Construct a 98% confidence interval estimate of the population
proportion of households that would purchase the additional telephone line.(PU)
(0.2534,0.3466)
5. In recent survey conducted by the society for human resource management, 453 of 853
personnel officials indicated that job seekers sometimes falsify past salaries.
a) Set up a 98% confidence interval estimate for the population proportion of
personnel officials who believe that job seekers sometimes falsify past salaries.
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Confidence interval Madhab Bhatta

b) Set up a 95% confidence interval estimate for the population proportion of

personnel officials who believe that job seekers sometimes falsify past salaries.
c) Which interval is wider?
6. In a survey of 763 women who had started their own businesses, 229 said that they
launched their businesses for greater freedom. Only 99 indicated that a desire to make
more money drove them to start their businesses.
a) Set up 90% confidence interval estimate of the population proportion of women
who start new businesses to gain freedom.
b) Set up 90% confidence interval estimate of the population proportion of women
who start new businesses to earn more money.(PU)
7. When a sample of 70 retail executives was surveyed regarding the poor November
performance of the retail industry, 66% believed that decreased sale were due to
unseasonably warm temperatures, resulting in consumer’s delaying purchase of cold-
weather items.
a. Estimate the standard error of the proportion of retail executive who
blames warm weather for low sales.
b. Find the lower and upper confidence limits for this proportion, given a
95% confidence level.(PU)
8. A study by Careerbuilder.com found that 20% of companies check out job candidates’
profiles on social networking sites like Facebook and Linkedin before deciding whether
to employ them. Assuming that the survey included a simple random sample of 1200
companies, construct a 90% confidence interval for the population proportion of
companies that check social networking sites before offering employment. (PU)
9. In an attempt to study the problem of using cell phones while driving. A survey of drivers
who use cell phones determined that 46% of the respondents reported having had to
swerve and 10% knew someone who had had a crash while talking on a cell phone.
Suppose the survey was based on 500 respondents.
a) Construct a 95% confidence interval estimate for the proportion of drivers who
reported having had to swerve.[0.416,0.503]
b) Construct a 95% confidence interval estimate for the proportion of drivers who
knew someone who had had a crash while talking on a cell phone. [0.073,0.126]
10. A survey of working women in North America was conducted by the Clinique uite of
Estee lauder cosmetics. Of the 1000 women surveyed, 55% believed that companies
should hold positions for those on maternity leave for six months or less and 45% felt that
they should hold those positions for more than six months.
Construct a 95% confidence interval estimate for the proportion of all working women in
North America who believe that companies should hold positions for those on maternity
leave for more than six months.
11. Mr. Sharma is a professional statistician and currently teaches Business Statistics at
college X. he surveyed 100 statisticians and found that 90 of them were in favor of
computer - aided statistical analysis in BBA.
a) Estimate the standard error of proportion.
b) Set up a 95% confidence interval estimate of the population proportion of the statisticians
who are in favor of computer – aided statistical analysis in BBA.
12. A survey of 500 customers selected at random arriving at a shopping mall showed that
350 of them are found to have cash and 150 used credit cards. Construct a 95%
confidence interval estimate of all the persons at the mall, who use cash for shopping.
(PU)
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Confidence interval Madhab Bhatta

13. A marketing research firm wants to estimate the share that foreign companies have in the
American market for certain products. A random sample of 100 consumers is obtained,
and it is found that 34 people in the sample are users of foreign made products the rest are
users of domestic products. Give a 95% confidence interval estimate for the share of
foreign products in this market.
14. After an extensive advertising campaign, the manger of a company wants to estimate the
proportion of potential customers that recognize a new product. She samples 120
potential consumers and finds that 54 recognize this product. She uses this sample
information to obtain a 95% confidence interval estimate. Determine her estimate in the
question.
15. A university dean is interested in determining the proportion of students who receive
some sort of financial aid. Rather than examine the records for all students, the dean
randomly selects 200 students and finds that 118 of them are receiving financial aid. Use
a 90%, 95% 99% confidence interval to estimate the true proportion of students who
receive financial aid. Also interpret these intervals.
16. Which would be the hardest for you to give up: your computer or your television? In a
survey of 1000 Internet users, 74% of the young tech elite(average age of 22) say their
computer would be very hard to give up, only 48% say their television would be very
hard to give up.
a) Develop a 95% confidence interval for the proportion of the young tech elite that
would find it very hard to give up your computer.(Z0.05=1.96)
b) Develop a 99% confidence interval for the proportion of the young tech elite that
would find it very hard to give up your television. (PU) (Z0.01)=2.57
17. In a little-reported poll conducted in early September, 1996, the Gallup Organization
asked 1000 US adults about their beliefs in UFOs and life in outer space. Here is a
summary of all findings related to the subject of UFOs and extraterrestrial life. The
results are based on telephone interviews with 500 US adults aged 18 and up. Here are
the questions and the results;
 Question: Have you heard about UFOs? Yes:87%, No:13%
 Question: Have you, yourself, ever seen anything your thought was an UFOs?
Yes:12%, No:87%, No opinion:1%
 Question: In your opinion, are UFOs something real or just people’s imagination?
Real:48%, Imagination:31%, No opinion:21%
Based on the above information, find a 99% confidence interval for the proportion
of US adults (at the time of survey) who
I. had heard about UFOs (87%)
II. had seen anything that was thought to be a UFO(12%)
III. believed that UFOs were something real.(48%)
What happens to the confidence interval if
 the confidence level is decreased?
 the sample size is increased? (PU)

18. Dr. Khatri noted economist, surveyed 150 households in a particular place and found that
63 of them were unable to bear the school fee of their children. Set up a 95% confidence
interval estimate for the true proportion of households who cannot actually bear the
school fee of their children.

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