# Minneapolis and New Orleans

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What is the difference in the average daily hotel room rates between Minneapolis and New Orleans? Suppose we want to estimate this difference by taking hotel rate samples from each city and using a 98% confidence level. The data for such a study follows.

Use this data to produce an interval estimate and also a point estimate for the mean difference in the hotel rates for the two cities. Assume the population variances are approximately equal and hotel rates in any given city is normally distributed.

MINNEAPOLIS---NEW ORLEANS

nm = 22--------nno = 20

Xm = $112------Xno = $122

Sm = $11-------Sno = $12

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##### Solution Summary

The solution discusses the difference in the average daily hotel room rates between Minneapolis and New Orleans? Suppose we want to estimate this difference by taking hotel rate samples from each city and using a 98% confidence level. The data for such a study follows.

Use this data to produce an interval estimate and also a point estimate for the mean difference in the hotel rates for the two cities. Assume the population variances are approximately equal and hotel rates in any given city is normally distributed.

MINNEAPOLIS---NEW ORLEANS

nm = 22--------nno = 20

Xm = $112------Xno = $122

Sm = $11-------Sno = $12

##### Solution Preview

Since both are normal distribution, the mean difference should also be a normal distribution.

Let's find the normal distribution of the mean difference:

Following the general formula for a confidence interval, the formula for a confidence interval on the difference between means is Md+-t*Smd

where ...

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