3.

3: Confidence Intervals for a Single Mean

𝑥̅ − 𝜇
𝑡=
𝑠/√𝑛

 Confidence Interval: Statistic ± Multiplier × Standard Error

s
𝑥̅ ± Multiplier ×
√n
 Valid for symmetric (bell-shaped) distribution
 Must have sample size of at least 20
Example: A sample of 102 Honda Civics showed that the average
price was $13,292 with a standard deviation of $4,535.
1. Find the standard error
𝑠 4,535
= = 449
√𝑛 √102
2. Find the margin of error
Multiplier × standard error = 2 × 449 = 898

3. Construct a 95% confidence interval

Statistic ± Margin of error = 13,292 ± 898
= ($12,394, $14,190)
4. Interpret the 95% confidence interval
With 95% confidence, the long run average price of a Honda
Civic is between $12,394 and $14,190.
Question: Is $14,000 a plausible value?
 Yes, $14,000 is inside the interval.