Suppose the number of equipment sales and service contracts that a store sold during the last six (6) months for treadmills and exercise bikes was as follows: treadmill exercise bike total sold 185 123 service contracts 67 55 the store can only sell a service contract on a new piece of equipment. of the 185 treadmills sold, 67 included a service contract and 118 did not.

95% confident that the true proportion of service contracts sold on treadmills versus exercise bikes is between -0.1969 and 0.02689.

Explanation:

S1 = number of service contracts for sold treadmills

S2 = number of service contracts for sold Exercise Bikes

P1 = 67/185 = .362162

P2 = 55/123 = .447154

P=n1p1 +n2p2/ n1 + N2 = 185*.362 + 123*.447/ 185 + 123 = .3961

Standard Error = .0571

Margin of Error = E = Za/2 * Se = 1.96 * .0571 = .1119

Lower Limit = (P1 – P2) – E =(.362 - .447) - .1119 = -.1969

Upper Limit = (P1 – P2) + E = (.362 -.447_ + .1119 =.02691

Therefore 95% confident that the true proportion of service contracts sold on treadmills versus exercise bikes is between -0.1969 and 0.02689.

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