A local pizza company is interested in estimating the percentage of customers who would take advantage of a coupon offer. To do this, they give the coupon out to a random sample of 100 customers. Of these, 45 actually use the coupon. Based on a 95 percent confidence level, the upper and lower confidence interval limits are approximately 0.3525 to 0.5475.

Question

Quizplus · Accepted Answer

The confidence interval for a proportion can be calculated using the formula for a binomial proportion confidence interval. Given that 45 out of 100 customers used the coupon, the sample proportion is 0.45. Using a 95% confidence level typically involves a Z-score of approximately 1.96 for the standard normal distribution. Plugging these values into the formula results in a confidence interval that, when rounded, is approximately 0.3525 to 0.5475, confirming the statement.

A Local Pizza Company Is Interested in Estimating the Percentage