Estimate the average with a margin of error

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Reference no: EM1394028

An investment firm with 10,000 clients would like to accurately forecast the average dollar amount their current customers will deposit over the coming year. They decide to telephone a random selection of 25 of their customers to ask how much they plan to deposit, and they would like to keep this sample as small as possible so the calls do not annoy too many customers. Since they will be multiplying this average by the total number of customers to get an overall forecast, they would like to accurately estimate this average with a margin of error of less than $4000. Last year the average deposit for all 10,000 clients was $25,000 with a standard deviation of $30,000. Do you think a small sample of 25 is enough to give them the margin of error they want? If not, how large a sample do you suggest they need to take? Justify your answer with relevant calculations.

Reference no: EM1394028

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