The housing market has recovered slowly from the economic crisis of 2008. Recently, in one large community, realtors randomly sampled 45 bids from potential buyers to estimate the average loss in home value. The sample showed the average loss was $10,560 with a standard deviation of $1800. a) Find a 95% confidence interval for the mean loss in value per home. (Use your calculator to create this interval. Do not do the calculations by hand.) b) Interpret this interval. c) A neighborhood realtor predicted the average loss in value would be $11,000. Based on your interval in part b, is the realtor right or wrong?
) The housing market has recovered slowly from the economic crisis of 2008. Recently, in one
large community, realtors randomly sampled 45 bids from potential buyers to estimate the
average loss in home value. The sample showed the average loss was $10,560 with a
standard deviation of $1800.
a) Find a 95% confidence interval for the mean loss in value per home. (Use your calculator
to create this interval. Do not do the calculations by hand.)
b) Interpret this interval.
c) A neighborhood realtor predicted the average loss in value would be $11,000. Based on
your interval in part b, is the realtor right or wrong?
d) Suppose the standard deviation of the losses had been $3600 instead of $1800. What
would the larger standard deviation do to the width of the confidence interval (assuming
the same level of confidence)
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Suppose the standard deviation of the losses had been $3600 instead of $1800. What would the larger standard deviation do to the width of the confidence interval assuming the same level of confidence.
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