As a condition of employment, Fashion Industries applicants must pass a drug test. Of the last 220 applicants, 14 failed the test. Develop a 99% confidence interval for the proportion of applicants that fail the test. Would it be reasonable to conclude that more than 10% of the applicants are now failing the test?

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Answer:

Of the last 220 applicants, 14 failed the test.

So, we have the sample proportion = [tex]\frac{14}{220}[/tex] = 0.064

At 99% confidence interval, z score is 2.576

Standard error or E = [tex]0.064+2.576\times (\frac{\sqrt{0.064\times(1-0.064)} }{\sqrt{220} } )[/tex] and [tex]0.064-2.576\times (\frac{\sqrt{0.064\times(1-0.064)} }{\sqrt{220} } )[/tex]

= [tex]0.064+0.04250[/tex] and [tex]0.064-0.04250[/tex]

= 0.0215, 0.1065

Rounding off we get 0.02,0.11

In percentage the applicants who failed lies between interval 2% and 11%.

So, yes it would be reasonable to conclude that more than 10% of the applicants are now failing the test.