In statistics, one of the important concepts is that of statistical inference: using data from a sample to draw conclusion(s) about the population from which the sample was drawn. Two commonly used methods of statistical inference are (1) confidence intervals and (2) hypothesis testing.
To remind us of what the two methods do, we'll consider the following example.
Ex: A restaurant owner wants to estimate the average dollar
purchase per customer. A sample of 81 customers spent an average of
$4, and the owner knows that the standard deviation of all the
expenditures is $0.63. (a) Construct a 95% confidence interval for the
true average expenditure per customer.