 # Costs are rising for all kinds of medical care. The mean monthly rent at assisted-living facilities was reported to have increased 17% over the last five years to $3486 ( The Wall Street Journal , October 27, 2012). Assume this cost estimate is based on a sample of 120 facilities and, from past studies, it can be assumed that the population standard deviation is σ =$650. a. Develop a 90% confidence interval estimate of the population mean monthly rent. b. Develop a 95% confidence interval estimate of the population mean monthly rent. c. Develop a 99% confidence interval estimate of the population mean monthly rent. d. What happens to the width of the confidence interval as the confidence level is increased? Does this seem reasonable? Explain. 13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884 13th Edition
Anderson
Publisher: CENGAGE L
ISBN: 9781305881884

#### Solutions

Chapter
Section
Chapter 8.1, Problem 10E
Textbook Problem
3316 views

## Costs are rising for all kinds of medical care. The mean monthly rent at assisted-living facilities was reported to have increased 17% over the last five years to $3486 (The Wall Street Journal, October 27, 2012). Assume this cost estimate is based on a sample of 120 facilities and, from past studies, it can be assumed that the population standard deviation is σ =$650. a. Develop a 90% confidence interval estimate of the population mean monthly rent. b. Develop a 95% confidence interval estimate of the population mean monthly rent. c. Develop a 99% confidence interval estimate of the population mean monthly rent. d. What happens to the width of the confidence interval as the confidence level is increased? Does this seem reasonable? Explain.

Expert Solution

a.

To determine

Find the 90% confidence interval for the population mean monthly rent.

### Explanation of Solution

Calculation:

The given information is that the mean monthly rent at assisted-living facilities are increase 17% over the last five years is $3,486 and the population standard deviations is$650.

The formula for confidence interval for population mean is,

x¯±zα2σn

From the “Table 8.1 value of zα2”, the value of zα2 for 90% is 1.645.

The value of confidence interval for population mean is,

x¯±zα2σn=3,486±1

Expert Solution

b.

To determine

Find the 95% confidence interval for population mean monthly rent.

Expert Solution

c.

To determine

Find the 99% confidence interval for population mean monthly rent.

Expert Solution

d.

To determine

Explain the width of the confidence level when the increase of confidence level.

Check whether it is reasonable or not.

### Want to see the full answer?

Check out a sample textbook solution.See solution

### Want to see this answer and more?

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

See solution

Find more solutions based on key concepts
Show solutions
BREAK-EVEN ANALYSIS The Weaver Watch Company sells watches for 25, fixed costs are 140,000, and variable costs ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Temporary accounts are closed at the end of each accounting period.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

Define sampling with replacement and explain why is it used?

Statistics for The Behavioral Sciences (MindTap Course List)

If sinB=13 in QIII, find the following. cotB2

Trigonometry (MindTap Course List)

Reminder Round all answers to two decimal places unless otherwise indicated. Another Line with Given Vertical I...

Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)

An integral for the solid obtained by rotating the region at the right about the x-axis is:

Study Guide for Stewart's Single Variable Calculus: Early Transcendentals, 8th

Solve H3258=411316.

Mathematics For Machine Technology

Divide: 14.356 0.74

Elementary Technical Mathematics

Expand each expression in Exercises 122. (2x3)(2x+3)

Finite Mathematics and Applied Calculus (MindTap Course List)

Sales Of MP3 Clock Radios Sales of a certain MP3 clock radio are approximated by the relationship S(x) = 6000x ...

Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach

True or false:

Study Guide for Stewart's Multivariable Calculus, 8th

The National Football League (NFL) records a variety of performance data for individuals and teams. To investig...

Modern Business Statistics with Microsoft Office Excel (with XLSTAT Education Edition Printed Access Card) (MindTap Course List) 