1. Estimating µ When σ is Known
Skill 32

2. Objectives
Explain the meanings of confidence level, error of estimate, and critical value.
Find the critical value corresponding to a given confidence level.
Compute confidence intervals for  when  is known. Interpret the results.
Compute the sample size to be used for estimating a mean .

3. We usually have to rely on information from a sample.
In this section, we develop techniques for estimating the population mean  using sample data.
We assume the population standard deviation  is known.

4. Assumptions about the random variable x
1) We have a simple random sample size n from a population of x values.
2) The value of σ, the population standard deviation of x, is known.
3) If x distribution is normal, than this works for any sample size.
4) If x has unknown distribution sample size n > 30.

5. An estimate of a population parameter given by a single number is called a point estimate for that parameter.
The margin of error is the magnitude of the difference between the sample point estimate and the true population parameter value.

6. The reliability of an estimate will be measured by the confidence level.
Suppose we want a confidence level of c, usually c is equal to a number such as 0.90, 0.95, or 0.99.
Confidence Level c and Corresponding Critical Value zc Shown on the Standard Normal Curve

7. The value zc is called the critical value for a confidence level of c.
The area under the normal curve from zc to –zc is the probability that the standardized normal variable z lies in that interval.

8. Example–Find a critical value
Let us use Table 5 of Appendix II to find a number z0.99 such that 99% of the area under the standard normal curve lies between –z0.99 and z0.99.
P(–z0.99 < z < z0.99) = 0.99
Solution:
If A is the area between –z and z then,
is the area to the left of z.
The corresponding area in the left tail is

9. Example–Solution
Use Table 5 of Appendix II to find the z value corresponding to a left-tail area of
Halfway between the areas corresponding to z = –2.58 and z = –2.57.
P(–2.58 < z < 2.58)  0.99

10. The margin of error using x-bar as a point
The margin of error using x-bar as a point estimate for μ is | x-bar – μ |
However, Equation (1) allows us to compute an error tolerance E that serves as a bound on the margin of error.
Using c% level of confidence, the point estimate x differs from the population mean by a maximal margin of error.

11. How to Find a Confidence Interval for µ when σ is Known

12. Example–Confidence interval for  with  known
Julia enjoys jogging. She has been jogging over a period of several years, during which time her physical condition has remained constantly good. Usually, she jogs 2 miles per day. The standard deviation of her times is  = 1.80 minutes. During the past year, Julia has recorded her times to run 2 miles. She has a random sample of 90 of these times.
For these 90 times, the mean was minutes. Let  be the mean jogging time for the entire distribution of Julia’s 2-mile running times (taken over the past year). Find a 0.95 confidence interval for .

13. Example–Solution Sample size n = 90 We also know .
Use the normal distribution to compute a confidence interval for .

14. Some Levels of Confidence and Their Corresponding Critical Values
Example–Solution
To compute E for 95% confidence interval
Using n=90 and σ=1.80
Some Levels of Confidence and Their Corresponding Critical Values

15. Example–Solution
We are 95% confident that the interval from minutes to minutes contains the population mean of jogging times for Julia.

17. Example–Sample size for estimating 
A wildlife study is designed to find the mean weight of salmon caught by an Alaskan fishing company. A preliminary study of a random sample of 50 salmon showed s  2.15 pounds.
How large a sample should be taken to be 99% confident that the sample mean is within 0.20 pound of the true mean weight ?

18. Example 3 – Solution Note:
In determining sample size, any fractional value of n is always rounded to the next higher whole number.
We conclude that a sample size of 770 will be large enough to satisfy the specifications.

19. 32: Estimating µ When σ is Known
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