The daily revenue from the sale of fried dough at a local street vendor in Boston is known to be normally distributed with a known standard deviation of $120. The revenue on each of the last 25 days is noted, and the average is computed as $550. Construct a 95% confidence interval for the population mean of the sale of fried dough by this vendor.
A) 120 ± 1.645(550/5)
B) 120 ± 1.96(550/5)
C) 550 ± 1.645(120/5)
D) 550 ± 1.96(120/5)

Question

Quizplus · Accepted Answer

We can use the formula for a confidence interval for a population mean when the population standard deviation is known:

CI = sample mean ± z*(standard deviation/square root of sample size)

Since we want a 95% confidence interval, we can use a z-value of 1.96.

Plugging in the values we know:

CI = 550 ± 1.96*(120/square root of 25)

Simplifying:

CI = 550 ± 1.96*(24)

CI = (499.2, 600.8)

Therefore, the best choice is D since it matches the calculated confidence interval.

The Daily Revenue from the Sale of Fried Dough at a Local