Suppose that the annual employer participation in the Canada/Quebec Pension Plan (CPP/QPP) per employee is normally distributed with a standard deviation of $625, but the mean is unknown. If 73.89% of such employer contributions are greater than $1,700, what is the mean annual employer contribution per employee? Suppose the mean annual CPP/QPP employer contribution per employee is $2,259 and the standard deviation is $625. If such employer contributions are normally distributed, 31.56% of the contributions are greater than what value?
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!
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Suppose that the annual employer participation in the Canada/Quebec Pension Plan (CPP/QPP) per employee is
normally distributed with a standard deviation of $625, but themean is unknown. If 73.89% of such employer contributions are greater than $1,700, what is the mean annual employer contribution per employee? Suppose the mean annual CPP/QPP employer contribution per employee is $2,259 and the standard deviation is $625. If such employer contributions are normally distributed, 31.56% of the contributions are greater than what value?
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