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A previous survey reported that 53% of respondents increased their portfolio value over the past 3 years. How large should a sample be if the margin of error is .03 for a 91% confidence interval

Respuesta :

Answer:

A sample of 796 is needed.

Step-by-step explanation:

In a sample with a number n of people surveyed with a probability of a success of [tex]\pi[/tex], and a confidence level of [tex]1-\alpha[/tex], we have the following confidence interval of proportions.

[tex]\pi \pm z\sqrt{\frac{\pi(1-\pi)}{n}}[/tex]

In which

z is the zscore that has a pvalue of [tex]1 - \frac{\alpha}{2}[/tex].

The margin of error is:

[tex]M = z\sqrt{\frac{\pi(1-\pi)}{n}}[/tex]

In this question, we have that:

[tex]\pi = 0.53[/tex]

91% confidence level

So [tex]\alpha = 0.09[/tex], z is the value of Z that has a pvalue of [tex]1 - \frac{0.09}{2} = 0.955[/tex], so [tex]Z = 1.695[/tex].

How large should a sample be if the margin of error is .03 for a 91% confidence interval

We need a sample of n, which is found when [tex]M = 0.03[/tex]. So

[tex]M = z\sqrt{\frac{\pi(1-\pi)}{n}}[/tex]

[tex]0.03 = 1.695\sqrt{\frac{0.53*0.47}{n}}[/tex]

[tex]0.03\sqrt{n} = 1.695\sqrt{0.53*0.47}[/tex]

[tex]\sqrt{n} = \frac{1.695\sqrt{0.53*0.47}}{0.03}[/tex]

[tex](\sqrt{n})^2 = (\frac{1.695\sqrt{0.53*0.47}}{0.03})^{2}[/tex]

[tex]n = 795.2[/tex]

Rounding up

A sample of 796 is needed.