Question: A survey is planned to determine the mean annual family medical expenses of employees of a large company. The management of the company wishes to be 95% confident that the sample mean is correct to within $50 of the population mean annual family medical expenses. A previous study indicates that the standard deviation is approximately ±$400.
a. How large a sample size is necessary?
b. If management wants to be correct to within ±$25, what sample size is necessary?