The mean amount u for all of the invoices for your company l

The mean amount u for all of the invoices for your company last month is not known. Based on your past experience, you are willing to assume that the standard deviation of invoice amounts is about $170. If you take a random sample of 110 invoices, what is the value of the standard deviation for x-bar? Using the Empirical Rule, the probability is about 0.95 that x-bar is within what amount of the population mean ??

Solution

standard deviation of xbar is 170/sqrt(110) = 16.208

The probability is about 0.95 that xbar is within plus or minus 2*16.208, or plus or minus 32.416of ?.