An automotive manufacturer wants to know the proportion of new car buyers who prefer foreign cars over domestic. Step 2 of 2 : Suppose a sample of 768 new car buyers is drawn. Of those sampled, 192 preferred foreign over domestic cars. Using the data, construct the 80% confidence interval for the population proportion of new car buyers who prefer foreign cars over domestic cars. Round your answers to three decimal places.

Answers

Answer 1

Answer:

The 80% confidence interval for the population proportion of new car buyers who prefer foreign cars over domestic cars is (0.23, 0.27).

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].

Suppose a sample of 768 new car buyers is drawn. Of those sampled, 192 preferred foreign over domestic cars.

This means that [tex]n = 768, \pi = \frac{192}{768} = 0.25[/tex]

80% confidence level

So [tex]\alpha = 0.2[/tex], z is the value of Z that has a pvalue of [tex]1 - \frac{0.2}{2} = 0.95[/tex], so [tex]Z = 1.28[/tex].

The lower limit of this interval is:

[tex]\pi - z\sqrt{\frac{\pi(1-\pi)}{n}} = 0.25 - 1.28\sqrt{\frac{0.25*0.75}{768}} = 0.23[/tex]

The upper limit of this interval is:

[tex]\pi + z\sqrt{\frac{\pi(1-\pi)}{n}} =  0.25 + 1.28\sqrt{\frac{0.25*0.75}{768}} = 0.27[/tex]

The 80% confidence interval for the population proportion of new car buyers who prefer foreign cars over domestic cars is (0.23, 0.27).


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