A noted psychic was tested for extrasensory perception The p

A noted psychic was tested for extrasensory perception. The psychic was presented with 200 cards face down and asked to determine if each card were one of five symbols: a star, a cross, a circle, a square, or three wavy lines. The psychic was correct in 50 cases. Let p represent the probability that the psychic correctly identifies the symbol on the card in a random trial. Assume the 200 trials can be treated as a simple random sample from the population of all guesses the psychic would make in his lifetime. How large a sample n would you need to estimate p with a margin of error of 0.01 with 95% confidence? Use the hypothesized value p = 0.20 as the value for p*.

Solution

Note that      
      
n = z(alpha/2)^2 p (1 - p) / E^2      
      
where      
      
alpha/2 =    0.025  
       
      
Using a table/technology,      
      
z(alpha/2) =    1.959963985  
      
Also,      
      
E =    0.01  
p =    0.2  
      
Thus,      
      
n =    6146.334113  
      
Rounding up,      
      
n =    6147   [ANSWER]