Choosing an appropriate sample size:
A consumer advocacy group is doing a large study on car rental practices. Among other things, the consumer group would like to estimate the mean monthly mileage, mu, of cars rented in the U.S. over the past year. The consumer group plans to choose a random sample of monthly U.S. rental car mileages and then estimate mu using the mean of the sample.
Using the value 750 miles per month as the standard deviation of monthly U.S. rental car mileages from the past year, what is the minimum sample size needed in order for the consumer group to be 95% confident that its estimate is within 150 miles per month of mu?
Carry your intermediate computations to at least three decimal places. Write your answer as a whole number (and make sure that it is the minimum whole number that satisfies the requirements).
The solution provides a step-by-step method for the calculation of sample size for population mean. Formula for the calculation and an interpretation of the results are also included. An interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.