An Apartment Complex Developer Is Considering Building Apartments in College $\sigma$

question 66

Essay

An apartment complex developer is considering building apartments in College Town, but first wants to do a market study. A sample of monthly rent values ($) for studio apartments in College Town was taken. The data collected from the 70-apartment sample is presented below. (Based on past experience, the developer assumes a known value of $\sigma$ = $55 for the population standard deviation.)
a. Develop a 98% confidence interval for the mean monthly rent for all studio apartments in this city.
b. Suppose the apartment developer wants a 98% confidence interval estimate of the population mean with a margin of error of E = $10. How large a sample size is needed?

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Definitions:

Process Costing System

An accounting method used for homogeneous products, where costs are assigned to processes or departments and averaged over the units produced.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all goods available for sale.

Finished Goods

Items that have been fully produced but are still awaiting sale or distribution to buyers.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the weighted average cost of all units available for sale during the period.