Many states are carefully considering steps that would help

Many states are carefully considering steps that would help them collect sales taxes on items purchased through the Internet. How many randomly selected sales transactions must be surveyed to determine the percentage that transpired over the Internet? Assume that we want to be 95% confident that the sample percentage is within seven percentage points of the true population percentage for all sales transactions. n = (Round up to the nearest integer.)

Solution

Given a=1-0.99=0.01, Z(0.005) =2.58 (from standard normal table)

So n=(Z/E)^2*p*(1-p)

=(2.58/0.07)^2*0.5*0.5

=339.6122

Take n=340