You have won the lottery and will receive 20 annual payments of $10,000 starting today. If you can invest these payments at 8.5%
1 answer:
Answer:
$102,677.20
Step-by-step explanation:
The present value of an annuity due is determined by the following expression:
Where 'P' is the amount of each payment received, 'r' is the interest rate on the investment and 'n' is the number of yearly payments.
With 20 annual payments of $10,000 at a rate of 8.5%, the present value is:
The present value of your winnings is $102,677.20.
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Answer:
a) The expected value of the sample mean weight is 20.4 pounds.
b)The standard deviation of the sample mean weight is 0.123.
c) There is a 14.46% probability the sample mean weight will be less than 20.27.
d) This value is .
Step-by-step explanation:
The Central Limit Theorem estabilishes that, for a random variable X, with mean and standard deviation
, a large sample size can be approximated to a normal distribution with mean
and standard deviation
.
Problems of normally distributed samples can be solved using the z-score formula.
In a set with mean and standard deviation
, the zscore of a measure X is given by:
The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.
In this problem, we have that:
A particular variety of watermelon weighs on average 20.4 pounds with a standard deviation of 1.23 pounds. This means that
Consider the sample mean weight of 100 watermelons of this variety. This means that .
a. What is the expected value of the sample mean weight? Give an exact answer.
By the Central Limit Theorem, it is the same as the mean of the population. So the expected value of the sample mean weight is 20.4 pounds.
b. What is the standard deviation of the sample mean weight? Give your answer to four decimal places.
By the Central Limit Theorem, that is:
The standard deviation of the sample mean weight is 0.123.
c. What is the approximate probability the sample mean weight will be less than 20.27?
This is the pvalue of Z when .
Since we are working with the sample mean, we use instead of
in the Z score formula
has a pvalue of 0.1446.
This means that there is a 14.46% probability the sample mean weight will be less than 20.27.
d. What is the value c such that the approximate probability the sample mean will be less than c is 0.96?
This is the value of that is in the 96th percentile, that is, it's Z score has a pvalue 0.96.
So we use
This value is .