Because of the relatively high interest rates, most consumers attempt to pay off their credit card bills promptly. However, this is not always possible. An analysis of the amount of interest paid monthly by a bank's Visa cardholders reveals that the amount is normally distributed with a mean of 29 dollars and a standard deviation of 6 dollars. A. What proportion of the bank's Visa cardholders pay more than 33 dollars in interest? Proportion = B. What proportion of the bank's Visa cardholders pay more than 40 dollars in interest? Proportion = C. What proportion of the bank's Visa cardholders pay less than 17 dollars in interest? Proportion = D. What interest payment is exceeded by only 19% of the bank's Visa cardholders? Interest Payment =
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
Because of the relatively high interest rates, most consumers attempt to pay off their credit card bills promptly. However, this is not always possible. An analysis of the amount of interest paid monthly by a bank's Visa cardholders reveals that the amount is
A. What proportion of the bank's Visa cardholders pay more than 33 dollars in interest?
Proportion =
B. What proportion of the bank's Visa cardholders pay more than 40 dollars in interest?
Proportion =
C. What proportion of the bank's Visa cardholders pay less than 17 dollars in interest?
Proportion =
D. What interest payment is exceeded by only 19% of the bank's Visa cardholders?
Interest Payment =
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