The high price of medicines is a source of major expense for those seniors in the United States who have to pay for these medicines themselves. A random sample of 2000 seniors who pay for their medicines showed that they spent an average of $4600 last year on medicines with a standard deviation of $800. Make a 98% confidence interval for the corresponding population mean.

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Asked Nov 12, 2019
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The high price of medicines is a source of major expense for those seniors in the United States who have to pay for these medicines themselves. A random sample of 2000 seniors who pay for their medicines showed that they spent an average of $4600 last year on medicines with a standard deviation of $800. Make a 98% confidence interval for the corresponding population mean.

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Expert Answer

Step 1

Confidence interval:

The (1-α) % confidence interval for population mean µ, when σ is known is given by:

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Step 2

Computing the confidence interval for population mean:

It is known that the average amount spent on medicines is $4,600 with corresponding standard deviation of $800. The confide...

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