The increasing cost of health care is an important issue tod

The increasing cost of health care is an important issue today. Suppose that a random sample of 22 small companies that offer paid health insurance as a benefit was selected. The mean health insurance cost per worker per month in the sample was $156. The sample standard deviation of the health cost per worker per month was $36. The upper limit of a 99% confidence interval for the mean health cost per worker per month for all small companies is?

Solution

The degree of freedom =n-1=22-1=21

Given a=1-0.99=0.01, t(0.01, df=21) =2.52 (from student t table)

So the upper limit is

xbar +t*s/vn = 156+2.52*36/sqrt(22)=175.3416