Explanation:
The confidence interval is constructed using the normal distribution, not the student's t-distribution because n is large (in line with the central limit theorem). The interval is given by:
Thus,
CI = $400,000 - 1.96($23,300/√100), $400,000 + 1.96($23,300/√100)
= ($395,433, $404,566.8)
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Construct a 95% confidence interval for the future value of a pension fund where the number of simulations is 100, the mean ending value is $400,000, and the standard deviation is $23,300.
A
($395,433.2, $404,566.8)
B
($400,000, $404,613)
C
($395,456, $404,456)
D
($395, $404)
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