Annual starting salaries for college graduates with degrees

Annual starting salaries for college graduates with degrees in business administration are generally expected to be between $30,000 and $45,000. Assume that a 95% confidence interval estimate of the population mean annual starting salary is desired. What is the planning value for the population standard deviation (to the nearest whole number)? _____ How large a sample should be taken if the desired margin of error is as shown below (to the nearest whole number)? $500? _________ $200? _______ $100? ______ Would you recommend trying to obtain the $100 margin of error?

Solution

Solution:

Planning value = Range/4

= (45000-30000)/4
= 15000/4
= 3750

a. $500?
n = (Za/2* /E)^2
n = (1.96* 3750/500)^2
n = 217

b. $200?
n = (Za/2* /E)^2
n = (1.96*3750/200)^2
n = 1351

c. $100?

n = (Za/2* /E)^2
n = (1.96* 3750/100)^2
n = 5403

d:

No, Sample requres too much time and expense