The annual family expenditure of 421 families in the main city is normally distributed with a mean of Rs. 800,000 and a standard deviation of Rs.75, 000. If a family of the city is selected randomly, Determine the percentage and number of families who will be spent greater than Rs. 900, 000 annually? The Government wants to identify families who spend the lowest 10% of the amount for the family in the city to provide a special grant as an annual subsidy of Rs.96,000 for each family. Determine cut-off annual expenses of a family to obtain the Government grant.
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!
The annual family expenditure of 421 families in the main city is
- Determine the percentage and number of families who will be spent greater than Rs. 900, 000 annually?
- The Government wants to identify families who spend the lowest 10% of the amount for the family in the city to provide a special grant as an annual subsidy of Rs.96,000 for each family. Determine cut-off annual expenses of a family to obtain the Government grant.
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