Application of Confidence interval and prediction interval

As we mentioned above, confidence interval is based on the unknown population

parameters. Most often, we use the confidence interval to bound the mean or standard deviation.

However, we can determine the coefficients, regression and proportions. Assume that, we

randomly select the sample of lamps to measure the burning time. Using 95% confidence level

the answer will be 1200 – 1230. The answer indicates that we can be 95% confidence that the

mean for the entire population of burning of lamps falls within the range of 1200 to 1230.

Confidential interval only measure the sampling error in relation to the factor of interest. When

we increase the sample size almost equal to the population, there will not be any sampling error.

In that situation, confidential interval will be equal to the population parameters.