Mael Illien
10/30/2019
A market researcher wants to evaluate car insurance savings at a competing company.
Based on past studies he is assuming that the standard deviation of savings is $100. He wants to collect data such that he can get a margin of error of no more than $10 at a 95% confidence level.
How large of a sample should he collect?
s <- 100
me <- 10
z <- qnorm(0.975)
\( ME = z^* \times \frac{s}{\sqrt{n}} \)
\( n = {\frac{z^* \times s}{ME}}^2 \)
n <- (z*s/me)^2
ceiling(n)
[1] 385
For a confidence level of 95% the minimum required sample size is 385.