The internal auditing staff of a local manufacturing company performs a sample audit each quarter to estimate the proportion of accounts that are delinquent (more than 90 days overdue).For this quarter,the auditing staff randomly selected 400 customer accounts and found that 80 of these accounts were delinquent.What is the 95 percent confidence interval for the proportion of all delinquent customer accounts at this company?
A).1608 to .2392
B).1992 to .2008
C).1671 to .2329
D).1485 to .2515
E).1714 to .2286

Question

Quizplus · Accepted Answer

The correct answer is A.The sample proportion of delinquent accounts is 80/400 = 0.2. The standard error of the proportion is sqrt(0.2*0.8/400) = 0.02. The 95% confidence interval is 0.2 +/- 1.96*0.02 = (0.1608, 0.2392).

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