You are interested in purchasing a new car. One of the many points you wish to consider is the resale value of the car after 5 years. Since you are particularly interested in a certain foreign sedan, you decide to estimate the resale value of this car with a 95% confidence interval. You manage to
Obtain data on 17 recently resold 5-year-old foreign sedans of the same model. These 17 cars were resold at an average price of $12,610 with a standard deviation of $700. What is the 95% confidence interval for the true mean resale value of a 5- year-old car of this model?

A) $12,610 \pm 2.120 ( 700 / \sqrt { 17 } )$

B) $12,610 \pm 2.120 ( 700 / \sqrt { 16 } )$

C) $12,610 \pm 2.110 ( 700 / \sqrt { 17 } )$

D) $12,610 \pm 1.960 ( 700 / \sqrt { 17 } )$

Question

You are interested in purchasing a new car. One of the many points you wish to consider is the resale value of the car after 5 years. Since you are particularly interested in a certain foreign sedan, you decide to estimate the resale value of this car with a 95% confidence interval. You manage to
Obtain data on 17 recently resold 5-year-old foreign sedans of the same model. These 17 cars were resold at an average price of $12,610 with a standard deviation of $700. What is the 95% confidence interval for the true mean resale value of a 5- year-old car of this model?

A) $12,610 \pm 2.120 ( 700 / \sqrt { 17 } )$

B) $12,610 \pm 2.120 ( 700 / \sqrt { 16 } )$

C) $12,610 \pm 2.110 ( 700 / \sqrt { 17 } )$

D) $12,610 \pm 1.960 ( 700 / \sqrt { 17 } )$

Quizplus · Accepted Answer

The correct choice uses the t-distribution with 16 degrees of freedom (n-1) and the t-value for a 95% confidence interval is approximately 2.120.

You Are Interested in Purchasing a New Car 12,610±2.120(700/17)12,610 \pm 2.120 ( 700 / \sqrt { 17 } )12,610±2.120(700/17​)

You Are Interested in Purchasing a New Car $12,610 \pm 2.120 ( 700 / \sqrt { 17 } )$