An investment firm with 10,000 clients would like to accurately forecast the average dollar amount their current customer 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 deposit for all 10,000 clients error less than $4,000. Last year the average deposit for all 10,000 clients was $25,000 with a standard deviationof $30,000. Do you think a 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.
This problem shows how to find the sample size necessary to estimate a population mean with a given acceptable margin of error and a given level of confidence.