According to an IRS study, it takes an average of 330 minutes for taxpayers to prepare, copy, and

electronically file a 1040 tax form. A consumer watchdog agency selects a random sample of 40 taxpayers
and finds the standard deviation of the time to prepare, copy, and electronically file form 1040 is 80 minutes.
What assumption or assumptions do you need to make about the shape of the population? What is the
standard error of the mean in this example? What is the likelihood the sample mean is greater than 320
minutes? What is the likelihood the sample mean is between 320 and 350 minutes? What is the likelihood the
sample mean is greater than 350 minutes?

1 According to an IRS study, it takes an average of 330 minutes for taxpayers to prepare, copy, and
electronically file a 1040 tax form. A consumer watchdog agency selects a random sample of 40
taxpayers and finds the standard deviation of the time to prepare , copy, and electronically file form
1040 is 80 minutes.

a. What assumption or assumptions do you need to make about the shape of the population?
b. What is the standard error of the mean in this example?
c. What is the likelihood the sample mean is greater than 320 minutes?
d. What is the likelihood the sample mean is between 320 and 350 minutes?
e What is the likelihood the sample mean is greater than 350 minutes?

a. What assumption or assumptions do you need to make about the shape of the population?

We need to assume that the population is normally distributed and sample standard deviation can be used to
approximate population standard deviation

b. What is the standard error of the mean in this example?

Standard deviation =σ= 80.0 minutes

sample size=n= 40
σx=standard error of mean=σ/√n= 12.6491 minutes
= ( 80 /√ 40)
c. What is the likelihood the sample mean is greater than 320 minutes?

Mean=μ= 330.0 minutes

sample mean= 320 minutes
z=(sample mean-μ)/σx= -0.7906 =(320-330)/12.6491
Prob-value corresponding to z= -0.7906 is 0.785411277
0r= 78.54%

Answer: likelihood the sample mean is greater than 320 minutes= 78.54%

d. What is the likelihood the sample mean is between 320 and 350 minutes?

Mean=μ= 330.0 minutes

Standard deviation =σ= 80.0 minutes
sample size=n= 40
 σx=standard error of mean=σ/√n= 12.6491 = ( 80 /√ 40)
x1= 350 minutes
x2= 320 minutes
z1=(x1-μ)/σx= 1.5811 =(350-330)/12.6491
z2=(x2-μ)/σx= -0.7906 =(320-330)/12.6491

Cumulative Probability corresponding to z1= 1.5811 is= 0.9431 0r=

Cumulative Probability corresponding to z2= -0.7906 is= 0.2146 0r=

Therefore probability that the value of x will be between x1= 350 and x2=
is = 72.85% =94.31%-21.46%

Answer:likelihood the sample mean is between 320 and 350 minutes= 72.85%

e What is the likelihood the sample mean is greater than 350 minutes?

Mean=μ= 330 minutes

sample mean= 350 minutes
z=(sample mean-μ)/σx= 1.5811 =(350-330)/12.6491
Prob-value corresponding to z= 1.5811 is 0.056927587
0r= 5.69%

Answer: likelihood the sample mean is greater than 350 minutes= 5.69%

2 Bob Nale is the owner of Nale's Texaco GasTown. Bob would like to estimate the mean number of gallons o
to his customers. From his records, he selects a random sample of 60 sales and finds the mean number of
8.60 and the standard deviation is 2.30 gallons. What is the point estimate of the population mean? Develop
confidence interval for the population mean. Interpret the meaning of part b.

Bob Nale is the owner of Nale's Texaco GasTown. Bob would like to estimate the mean number of gallons of gaso
sold to his customers. From his records, he selects a random sample of 60 sales and finds the mean number of ga
sold is 8.60 and the standard deviation is 2.30 gallons.
a. What is the point estimate of the population mean?
b. Develop a 99 percent confidence interval for the population mean.
c. Interpret the meaning of part b.

a. What is the point estimate of the population mean?

point estimate of population mean= mean obtained from the sample= 8.60

b. Develop a 99 percent confidence interval for the population mean.

Confidence limits

Mean=μ= 8.60 gallons

Standard deviation =σ= 2.30 gallons
 sample size=n= 60
σx=standard error of mean=σ/√n= 0.2969 = ( 2.3 /√ 60)
Confidence level= 99%
Therefore Significance level=α= 1% =100% -99%
No of tails= 2
This is a 2 tailed test because we are calculating the confidence interval

Since sample size= 60 >= 30

use normal distribution

Z at the 0.01 level of significance 2 tailed test =

Upper confidence limit= μ+z*σx= 9.3648 =8.6+2.5758*0.2969

Lower confidence limit= μ-z*σx= 7.835 =8.6-2.5758*0.2969

99% Confidence limit: (rounding off the values)

Upper limit= 9.36 gallons
Lower limit= 7.84 gallons

c. Interpret the meaning of part b.

If we were to take different samples of size 60 from the population and calculate the mean number of gallons of ga
sold to the customers, in 99% of the cases we will find the sample mean to be between 7.84 and 9.36 gallons

3 Dr. Patton is a Professor of English. Recently he counted the number of misspelled words in a group of stu
his class of 40 students, the mean number of misspelled words was 6.05 and the standard deviation 2.44 p
Construct a 95 percent confidence interval for the mean number of misspelled words in the population of s

Confidence limits

Mean=μ= 6.05 words

Standard deviation =σ= 2.44 words
sample size=n= 40
σx=standard error of mean=σ/√n= 0.3858 = ( 2.44 /√ 40)
Confidence level= 95%
Therefore Significance level=α= 5% =100% -95%
No of tails= 2
This is a 2 tailed test because we are calculating the confidence interval

Since sample size= 40 >= 30

use normal distribution

Z at the 0.05 level of significance 2 tailed test = 1.96

Upper confidence limit= μ+z*σx= 6.8062 =6.05+1.96*0.3858

Lower confidence limit= μ-z*σx= 5.2938 =6.05-1.96*0.3858
 95% Confidence limit: (rounding off the values)
Upper limit= 6.81 words
Lower limit= 5.29 words

A sample of 100 observations revealed that p = .75. At the .05 significance level, can the null hypothesis be rejecte
decision rule. Compute the value of the test statistic. What is your decision regarding the null hypothesis?

Data regarding p is missing. Let us assume that you are testing

Null Hypothesis : p≤= 0.7
Alternative Hypothesis: p > 0.7

Decision rule: If the area in left tail is less than the level of significance (0.05 0r 5%) reject the Null Hypothesis
Or alternatively z statistic computed for the sample should be less than z corresponding to 5% significance level
(Since we are testing the right tail)
p 70.00%
q 30.00%
n= 100
σp=standard error of proportion=√(pq/n)= 0.04583 =√ ( 70% * 30% / 100)

Null Hypothesis:Ho: p ≤= 0.7

Alternative Hypothesis:H1: p > 0.7
Level of significance=α= 0.05

sample proportion= 75.00%

z=(sample proportion-population proportion)/ standard error= 1.091 =(0.75-0.7)/0.04583

This is a one tailed test therefore area in one of the tails is checked
P(z) corresponding to the obtained z value of 1.091 is 86.24%
Thus the area in the right tail= 13.76% =100%-86.24%
For the null hypothesis to hold the area in the right tail should at least be greater than

Since this condition is satisfied accept Null Hypothesis:Ho: p ≤= 0.7

Alternatively, z for sgnificance=0.05 1.64

Since, this is greater than z statistic= 1.091

Accept Null Hypothesis : p≤= 0.7

A sample of 120 observations revealed that p = .30. At the .05 significance level, can the null hypothesis be rejecte
decision rule. Compute the value of the test statistic. What is your decision regarding the null hypothesis?

Data regarding p is missing. Let us assume that you are testing

Null Hypothesis : p= 0.40
Alternative Hypothesis: p ≠ 0.4
Decision rule: If the area in two tails is less than the level of significance (0.05 0r 5%) reject the Null Hypothesis
Or alternatively z statistic computed for the sample should be lesser than z corresponding to 5% significance level

p 40.00%
q 60.00%
n= 120
σp=standard error of proportion=√(pq/n)= 0.04472 =√ ( 40% * 60% / 120)

Null Hypothesis:Ho: p=0.4

Alternative Hypothesis:H1: p ≠ 0.4
Level of significance=α= 0.05

sample proportion= 30.00%

z=(sample proportion-population proportion)/ standard error= -2.2361 =(0.3-0.4)/0.04472

This is a one tailed test therefore area in one of the tails is checked
P(z) corresponding to the obtained z value of -2.2361 is 1.27%
Thus the area in the two tails= 2.53% =2*1.27%
For the null hypothesis to hold the area in the two tails should at least be greater than

Since this condition is not satisfied accept Alternative Hypothesis:H1: p ≠ 0.4

Alternatively, z for sgnificance=0.05 1.96 this is less than z statistic= 2.2361

Condition for accepting Null Hypothesis: z statistic computed for the sample should be lesser than z correspo
Since this condition is not satisfied accept Alternative Hypothesis:H1: p ≠ 0.4
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