WEEKLY LEARNING ACTIVITY SHEETS

Statistics and Probability Quarter 2 Week 1

Understanding Confidence Interval Estimates for the Population
Mean

Learning Objectives:
At the end of this activity, you are expected to:
 define confidence level;
 define confidence interval;
 apply the normal curve concepts in computing the interval
estimate; and
 compute confidence interval estimates.

Key Concepts:
 Confidence level
 Confidence Interval
 Confidence interval estimates

Discussion:

Confidence Intervals

An interval of 4 plus or minus 2

A Confidence Interval is a range of values we are fairly sure our true value lies in.

Example: Average Height

We measure the heights of 40 randomly chosen men, and get a mean height of 175cm,
We also know the standard deviation of men's heights is 20cm.
The 95% Confidence Interval (we show how to calculate it later) is:
175cm ± 6.2cm
This says the true mean of ALL men (if we could measure all their heights) is likely to be
between 168.8cm and 181.2cm.
But it might not be!
The "95%" says that 95% of experiments like we just did will include the true mean, but 5%
won't.
So there is a 1-in-20 chance (5%) that our Confidence Interval does NOT include the true
mean.
Calculating the Confidence Interval
Step 1: start with
 the number of observations n
 the mean X
 and the standard deviation s
Note: we should use the standard deviation of the entire population, but in many cases we
won't know it.
We can use the standard deviation for the sample if we have enough observations (at least
n=30, hopefully more).
Using our example:
 number of observations n = 40
 mean X = 175
 standard deviation s = 20
Step 2: decide what Confidence Interval we want: 95% or 99% are common choices. Then
find the "Z" value for that Confidence Interval here:
Confidence
Z
Interval
80% 1.282
85% 1.440
90% 1.645
95% 1.960
99% 2.576
99.5% 2.807
99.9% 3.291
For 95% the Z value is 1.960
Step 3: use that Z value in this formula for the Confidence Interval
X  ±  Zs√n
Where:
 X is the mean
 Z is the chosen Z-value from the table above
  s is the standard deviation
 n is the number of observations
And we have:
175 ± 1.960 × 20√40
Which is:
175cm ± 6.20cm
In other words: from 168.8cm to 181.2cm
The value after the ± is called the margin of error
The margin of error in our example is 6.20cm

Statisticians use a confidence interval to describe the amount of uncertainty associated with
a sample estimate of a population parameter.

How to Interpret Confidence Intervals

Suppose that a 90% confidence interval states that the population mean is greater than 100
and less than 200. How would you interpret this statement?

Some people think this means there is a 90% chance that the population mean falls between
100 and 200. This is incorrect. Like any population parameter, the population mean is a
constant, not a random variable. It does not change. The probability that a constant falls
within any given range is always 0.00 or 1.00.

The confidence level describes the uncertainty associated with a sampling method. Suppose

we used the same sampling method to select different samples and to compute a different
interval estimate for each sample. Some interval estimates would include the true
population parameter and some would not. A 90% confidence level means that we would
expect 90% of the interval estimates to include the population parameter; a 95% confidence
level means that 95% of the intervals would include the parameter; and so on.

Confidence Interval Data Requirements

To express a confidence interval, you need three pieces of information.

 Confidence level
 Statistic
 Margin of error

Given these inputs, the range of the confidence interval is defined by the sample
statistic + margin of error. And the uncertainty associated with the confidence interval is
specified by the confidence level.
Often, the margin of error is not given; you must calculate it. Previously, we described how
to compute the margin of error.

How to Construct a Confidence Interval

There are four steps to constructing a confidence interval.

 Identify a sample statistic. Choose the statistic (e.g, sample mean, sample
proportion) that you will use to estimate a population parameter.
 Select a confidence level. As we noted in the previous section, the confidence level
describes the uncertainty of a sampling method. Often, researchers choose 90%,
95%, or 99% confidence levels; but any percentage can be used.
 Find the margin of error. If you are working on a homework problem or a test
question, the margin of error may be given. Often, however, you will need to
compute the margin of error, based on one of the following equations.

Margin of error = Critical value * Standard deviation of statistic

Margin of error = Critical value * Standard error of statistic

For guidance, see how to compute the margin of error.

 Specify the confidence interval. The uncertainty is denoted by the confidence level.
And the range of the confidence interval is defined by the following equation.

Confidence interval = sample statistic + Margin of error

The sample problem in the next section applies the above four steps to construct a 95%
confidence interval for a mean score. The next few lessons discuss this topic in greater
detail.

Test Your Understanding

Problem 1
Suppose we want to estimate the average weight of an adult male in NCR. We draw a
random sample of 1,000 men from a population of 1,000,000 men and weigh them. We find
that the average man in our sample weighs 180 pounds, and the standard deviation of the
sample is 30 pounds. What is the 95% confidence interval?
(A) 180 + 1.86
(B) 180 + 3.0
(C) 180 + 5.88
(D) 180 + 30
(E) None of the above
Solution
The correct answer is (A). To specify the confidence interval, we work through the four steps
below.
 Identify a sample statistic. Since we are trying to estimate the mean weight in the
population, we choose the mean weight in our sample (180) as the sample statistic.
 Select a confidence level. In this case, the confidence level is defined for us in the
problem. We are working with a 95% confidence level.
 Find the margin of error. Previously, we described how to compute the margin of
error. The key steps are shown below.
 Find standard error. The standard error (SE) of the mean is:
SE = s / sqrt( n )
SE = 30 / sqrt(1000) = 30/31.62 = 0.95
 Find critical value. The critical value is a factor used to compute the margin of
error. To express the critical value as a t score (t*), follow these steps.
o Compute alpha (α):
α = 1 - (confidence level / 100) = 0.05
o Find the critical probability (p*):
p* = 1 - α/2 = 1 - 0.05/2 = 0.975
o Find the degrees of freedom (df):
df = n - 1 = 1000 - 1 = 999
o The critical value is the t statistic having 999 degrees of freedom and
a cumulative probability equal to 0.975. From the t Distribution
Calculator, we find that the critical value is 1.96.
Note: We might also have expressed the critical value as a z-score. Because the sample size
is large, a z-score analysis produces the same result - a critical value equal to 1.96.
 Compute margin of error (ME):
ME = critical value * standard error
ME = 1.96 * 0.95 = 1.86
 Specify the confidence interval. The range of the confidence interval is defined by
the sample statistic + margin of error. And the uncertainty is denoted by the
confidence level. Therefore, this 95% confidence interval is 180 + 1.86.

Activity 1: Ethnic Groups

Among various ethnic groups, the standard deviation of heights is known to be

approximately three inches. We wish to construct a 95% confidence interval for the mean
height of male Ilocanos. Forty-eight male Ilocanos are surveyed. The sample mean is 71
inches. The sample standard deviation is 2.8 inches.
a.
i. x¯ =________
ii. σ =________
iii. n =________
b. In words, define the random variables X and X¯.
c. Which distribution should you use for this problem? Explain your choice.
d. Construct a 95% confidence interval for the population mean height of male Swedes.
i. State the confidence interval.
ii. Sketch the graph.
 iii. Calculate the error bound.
b. What will happen to the level of confidence obtained if 1,000 male Ilocanos are
surveyed instead of 48? Why?

Activity 2: Accounting Firm

Suppose that an accounting firm does a study to determine the time needed to complete
one person’s tax forms. It randomly surveys 100 people. The sample mean is 23.6 hours.
There is a known standard deviation of 7.0 hours. The population distribution is assumed to
be normal.
a.
i. x¯= ________
ii. σ= ________
iii. n= ________
b. In words, define the random variables XX and X¯X¯.
c. Which distribution should you use for this problem? Explain your choice.
d. Construct a 90% confidence interval for the population mean time to complete the
tax forms.
i. State the confidence interval.
ii. Sketch the graph.
iii. Calculate the error bound.
b. If the firm wished to increase its level of confidence and keep the error bound the
same by taking another survey, what changes should it make?
c. If the firm did another survey, kept the error bound the same, and only surveyed 49
people, what would happen to the level of confidence? Why?
d. Suppose that the firm decided that it needed to be at least 96% confident of the
population mean length of time to within one hour. How would the number of
people the firm surveys change? Why?

Reflection:

In real life, confidence statements are important. They influence

decisions to be made. Cite a situation or instances (e.g., statements about
weather conditions) that require a high degree of confidence statement from
the people who make official announcements. Write an explanation of your
thoughts.

References for learners:

Bataller, Ramil T., Statistics and Probability. Salesiana Books by Don Bosco
Press, Inc., 2016.

Answer Key:

Activity 1:
 a.
i. 71
ii. 3
iii. 48
b. X is the height of an Ilocano male, and is the mean height from a sample
of 48 Ilocano males.
c. Normal. We know the standard deviation for the population, and the
sample size is greater than 30.
d.
i. CI: (70.151, 71.49)

Figure 8.2.1.
ii. EBM = 0.849
e. The confidence interval will decrease in size, because the sample size
increased. Recall, when all factors remain unchanged, an increase in sample
size decreases variability. Thus, we do not need as large an interval to capture
the true population mean.

Activity 2:

a.
i. x¯=23.6x¯=23.6
ii. σ=7σ=7
iii. n=100n=100
b. XX is the time needed to complete an individual tax form. X¯X¯ is the
mean time to complete tax forms from a sample of 100 customers.
c. N(23.6,7100√)N(23.6,7100) because we know sigma.
d.
i. (22.228, 24.972)
 ii. Figure 8.2.7.
iii. EBM=1.372EBM=1.372
b. It will need to change the sample size. The firm needs to determine what
the confidence level should be, then apply the error bound formula to
determine the necessary sample size.
c. The confidence level would increase as a result of a larger interval.
Smaller sample sizes result in more variability. To capture the true
population mean, we need to have a larger interval.
d. According to the error bound formula, the firm needs to survey 206
people. Since we increase the confidence level, we need to increase
either our error bound or the sample size.

Alberto M. Aquino Jr.

San Vicente National High School
Butuan City Division
[email protected]