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A college financial advisor wants to estimate the mean cost of textbooks per quarter for students at the college. For the estimate to be useful, it should have a margin of error of 20 dollars or less. The standard deviation of prices is estimated to be around 100 dollars. How large of a sample size needs to be used to be 95% confident, with the given margin of error?

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mathmate

Answer:

minimum sample size = 97

Step-by-step explanation:

Margin of error = 20

standard deviation = 100

sample size = n

standard error = 100/sqrt(n)

confidence level, alpha = 95%

Using the standard rule for 95% confidence

standard error <= sample mean [tex]\pm[/tex] 1.96 standard error, or

20 <= 1.96*100 / sqrt(n)

n >= (1.96*100/20)^2 = 9.8^2 = 96.04  

=>

n >= 97

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