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Introductory Business Statistics

Formula Review

Introductory Business StatisticsFormula Review

8.2 A Confidence Interval for a Population Standard Deviation Unknown, Small Sample Case

s = the standard deviation of sample values.

t=  x - μ s n t=  x - μ s n is the formula for the t-score which measures how far away a measure is from the population mean in the Student’s t-distribution

df = n - 1; the degrees of freedom for a Student’s t-distribution where n represents the size of the sample

T~tdf the random variable, T, has a Student’s t-distribution with df degrees of freedom

The general form for a confidence interval for a single mean, population standard deviation unknown, and sample size less than 30 Student's t is given by: x¯ - t v,α ( s n ) μ x¯ + t v,α ( s n ) x¯- t v,α ( s n )μx¯+ t v,α ( s n )

8.3 A Confidence Interval for A Population Proportion

p′= xnxn where x represents the number of successes in a sample and n represents the sample size. The variable p′ is the sample proportion and serves as the point estimate for the true population proportion.

q′ = 1 – p

The variable p′ has a binomial distribution that can be approximated with the normal distribution shown here. The confidence interval for the true population proportion is given by the formula:

p' - Zα p'q' n p p' + Zα p'q' n p'-Zαp'q' n pp'+Zαp'q' n

n=  Z α 2 2 p q e 2 n=  Z α 2 2 p q e 2 provides the number of observations needed to sample to estimate the population proportion, p, with confidence 1 - α and margin of error e. Where e = the acceptable difference between the actual population proportion and the sample proportion.

8.4 Calculating the Sample Size n: Continuous and Binary Random Variables

n = Z 2 σ 2 (x¯-μ)2 Z 2 σ 2 (x¯-μ)2 = the formula used to determine the sample size (n) needed to achieve a desired margin of error at a given level of confidence for a continuous random variable

n = Zα2pq e2 n= Zα2pq e2 = the formula used to determine the sample size if the random variable is binary

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