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Interpret confidence intervals
€24.84 – €28.89Price range: €24.84 through €28.89Certainly! Below is an example of how to interpret a confidence interval, based on hypothetical data values.
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**Interpretation of Confidence Interval**
**Given Values:**
– Sample Mean (\(\bar{x}\)): 75
– Standard Error (SE): 5
– Confidence Level: 95%
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### **Step 1: Understanding the Confidence Interval Formula**
A confidence interval (CI) is a range of values that is used to estimate an unknown population parameter. The formula for a confidence interval is:
\[
\text{CI} = \bar{x} \pm Z \times \text{SE}
\]
Where:
– \(\bar{x}\) is the sample mean,
– \(Z\) is the Z-score corresponding to the chosen confidence level (for 95% confidence, \(Z = 1.96\)),
– \(\text{SE}\) is the standard error of the sample mean.
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### **Step 2: Calculation of the Confidence Interval**
For a 95% confidence level:
– The Z-score is **1.96**.
– Sample Mean (\(\bar{x}\)) = **75**
– Standard Error (SE) = **5**
Now, calculate the margin of error:
\[
\text{Margin of Error} = 1.96 \times 5 = 9.8
\]
Thus, the 95% confidence interval is:
\[
\text{CI} = 75 \pm 9.8
\]
This results in:
\[
\text{CI} = (65.2, 84.8)
\]
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### **Step 3: Interpretation**
The **95% confidence interval** for the population mean is **(65.2, 84.8)**. This means that we are **95% confident** that the true population mean lies between 65.2 and 84.8 based on the sample data.
– **Confidence Level:** The 95% confidence level indicates that if we were to take 100 different samples and compute a confidence interval for each sample, approximately 95 of those intervals would contain the true population mean.
– **Interpretation of Range:** The true population mean is likely to be within the range of 65.2 to 84.8, but there is a 5% chance that the true mean lies outside of this range.
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### **Conclusion:**
In conclusion, the confidence interval of **(65.2, 84.8)** provides an estimated range for the population mean based on the sample data. The interpretation suggests a high level of certainty about where the true mean is located, and the interval provides a useful tool for making informed decisions in the context of statistical inference.
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This explanation breaks down the process of calculating and interpreting a confidence interval, ensuring clarity and accuracy in a technical context.