Private colleges and universities rely on money contributed

Private colleges and universities rely on money contributed by individuals and corporations for their operating expenses. Much of this money is put into a fund called an endowment, and the college spends only the interest earned by the fund. A recent survey of 8 private colleges in the United States revealed the following endowments (in millions of dollars): 60.2, 47.0, 235.1, 490.0, 122.6, 177.5, 95.4, and 220.0.

Calculate a 95% confidence interval for the mean endowment of all the private colleges in the United States assuming a normal distribution for the endowments. Explain/show how you obtain your answer.

Solution

Confidence Interval
CI = x