Lakefront resort is planning for its summer busy season. It wishes to estimate with 95% confidence the average number of nights each guest will stay in a consecutive visit. Using a sample of guests who stayed last year, the average number of nights per guest is calculated at 5 nights. The standard deviation of the sample is 1.5 nights. The size of the sample used is 120 guests and the resort desires a precision of plus or minus .5 nights. What is the standard error of the mean in the lakefront resort example? Within what range below can the resort expect with 95% confidence for the true population mean to fall?

In order to calculate the critical value we need to find first the degrees of freedom, given by:

Since the Confidence is 0.95 or 95%, the value of and , and we can use excel, a calculator or a table to find the critical value. The excel command would be: "=-T.INV(0.025,119)".And we see that

The standard error is given by:

And replacing we got:

So on this case the 95% confidence interval would be given by (4.729;5.271)    

Step-by-step explanation:

Previous concepts

A confidence interval is "a range of values that’s likely to include a population value with a certain degree of confidence. It is often expressed a % whereby a population means lies between an upper and lower interval".

The margin of error is the range of values below and above the sample statistic in a confidence interval.

Normal distribution, is a "probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean".

represent the sample mean

population mean (variable of interest)

s=1.5 represent the sample standard deviation

n=120 represent the sample size  

Confidence interval

The confidence interval for the mean is given by the following formula:

  (1)

In order to calculate the critical value we need to find first the degrees of freedom, given by:

Since the Confidence is 0.95 or 95%, the value of and , and we can use excel, a calculator or a table to find the critical value. The excel command would be: "=-T.INV(0.025,119)".And we see that

The standard error is given by:

And replacing we got:

Now we have everything in order to replace into formula (1):

So on this case the 95% confidence interval would be given by (4.729;5.271)