Assuming that tips are normally distributed, construct a 99% confidence interval on the population mean tip µ

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The critical value for 99% confidence level is 2.861. The standard error is 0.5/√20. 19 degrees of freedom are used to find the critical t value from tables.

The confidence interval is 3.75±2.861×0.5/√20, that is, 3.75±0.32, putting the tip between $3.43 and $4.07.

This corresponds to 11.4% and 13.6% approx.

by Top Rated User (765k points)

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