Earlier in this chapter, we learned about confidence intervals, and we know how to find their associated critical z-scores. But we have yet to fully construct a confidence interval for a population proportion p, so that's exactly what we're going to do here, putting everything that we've learned so far together in a step-by-step process to ultimately construct a confidence interval for p. So let's go ahead and get started here by jumping right into our example. Here, we're told that from a survey of 200 people, 90 of those people preferred computers from brand A over brand B and we're asked here to construct a 90% confidence interval for the true proportion of people who prefer computers from brand A. Now remember that saying the true proportion is really just referring to the population proportion, p.
Now in this problem, since we're given the number of people that preferred computers from brand A and the total number of people that were surveyed, we can easily divide that 90 by that 200 to get p̂, which is what we want to use as our point estimate here. So to construct our confidence interval for p, we want to use that point estimate p̂, along with our margin of error, which we can find using this equation. That e, our margin of error, is equal to that critical z-value, that's zα/2, times the square root of p̂ (that point estimate) times (1 minus p̂) over n, our total sample size. So that's how we can ultimately construct a confidence interval for our population proportion. But before we can fully calculate that margin of error to construct that confidence interval, we need to go ahead and start from step 1 and verify that we can even use this process.
Remember that the sampling distribution of p̂, which we know is x over n like we talked about earlier, we know that the sampling distribution is approximately normal when both np and nq are greater than or equal to 5. Now, if we work this out mathematically, all this really means is that we have at least 5 successes and at least 5 failures. So that's all we need to verify here. Now looking at the specific problem that we're working with here, we were told that 90 people preferred brand A. So those are successes here.
Now that's definitely at least 5, so we can go ahead and check that off. Now since we surveyed 200 people in total, that means that 110 of them preferred brand B, representing a failure in this specific scenario. So that's definitely also at least 5. We can go ahead and move on to step 2 here, finding our critical z-value, zα/2. Remember that this is entirely based on what our confidence level is.
So with this 90% confidence level, we know that α/2 is going to be equal to 1 minus 0.9 (that confidence level), over 2, which gives us 0.05. Now using either a table or a calculator, this ultimately gives us that our critical z-value, zα/2, is equal to 1.645. So with that critical z-value found, we can go ahead and move on to step 3. Now in step 3, this is specifically if this is not already given to us. Here, we want to find p̂, our point estimate, which is equal to x over n.
Now in this case, p̂ is not given to us explicitly, so we do need to go ahead and calculate it by taking x and dividing it by n. So taking that x value of 90 and dividing it by my total sample size of 200, this gives me p̂ equals 0.45. So with that point estimate found, we now need to determine our margin of error using the equation that we looked at above. Remember that our margin of error is going to be equal to that critical z-value that we just found times the square root of p̂ (that point estimate) times (1 minus p̂) over n. So looking at this margin of error here, e is going to be equal to 1.6451.645√0.45(1-0.45)200times the square root of 0.45 (that point estimate), times 1 minus 0.45 (which is 0.55) over that total sample size, which in this case is 200.
Now working out this algebra here, multiplying all of this together ultimately gives us a margin of error of 0.0579. Now that we have that margin of error, we can move on to our final step in actually finding our confidence interval by subtracting and adding that margin of error to our point estimate, p̂. So constructing this confidence interval here, I'm going to go ahead and abbreviate that as c I. I'm going to take my point estimate, p̂, that's that 0.45, and go ahead and subtract that 0.0579, that margin of error that we just found for that lower bound, and then go ahead and add 0.45 plus 0.0579 for that upper bound. Now this ultimately gives me a lower bound here of 0.3921 and an upper bound of 0.5079.
Now we've constructed our confidence interval. But what exactly do these values mean? Often, the most important part of constructing our confidence interval is being able to interpret it. So going back to our original problem here, we know that we are constructing a 90% confidence interval. So that means that based on this confidence interval that we found, we can say that we are 90% confident that the true proportion of people who prefer brand A Computers is in between these two values.
So as a percentage, that's 39.21% and 50.79%. So now we've successfully constructed and interpreted this confidence interval. Now we're going to continue getting a bit more practice with this coming up next. Let us know if you have any questions, and I'll see you in the next one.