The local energy company claims the average annual electricity bill for its subscribers is just $600. A consumer watchdog group wants to dispute this claim. All agree that the standard deviation sigma of annual electricity bills is $150. Some time later, a wealthy activist provides funding for a simple random sample of 250 households. The average annual electricity bill for this sample is $622. Find a 95% confidence interval for the true mean annual electric bill, based on this sample.

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The local energy company claims the average annual electricity bill for its subscribers is just $600. A consumer watchdog group wants to dispute this claim. All agree that the standard deviation sigma of annual electricity bills is $150.  Some time later, a wealthy activist provides funding for a simple random sample of 250 households. The average annual electricity bill for this sample is $622. Find a 95% confidence interval for the true mean annual electric bill, based on this sample.

Demi-Leigh Barrera · Accepted Answer

Step 1 It is assumed that the sample mean is 622 and the population standard deviation is 150. Step 2 From the given information, the confidence level is 0.95 and the level of of significance (α) is 0.05(=1−0.95). The 95% confidence interval for the true mean is obtained as follows: 95%CI=x―±zα2(σn) =622±z0.052(150250) =622±1.96(150250)  =(603.4058,640.5942)

The local energy company claims the average annual electricity bill for its subscribers is just...

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