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Setler [38]
3 years ago
14

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 9 dollars.
A. What proportion of the bank's Visa cardholders pay more than 31 dollars in interest?

Proportion =

B. What proportion of the bank's Visa cardholders pay more than 41 dollars in interest?

Proportion =

C. What proportion of the bank's Visa cardholders pay less than 19 dollars in interest?

Proportion =

D. What interest payment is exceeded by only 18% of the bank's Visa cardholders?

Interest Payment =
Business
1 answer:
telo118 [61]3 years ago
3 0

Answer:

a) Proportion = 41.3%

b) Proportion = 9.18%

c) Proportion = 13.35%

d) Interest payment = $37.28

Explanation:

We have normal distribution with mean = 29 and standard deviation = 9

a) The proportion of the bank’s Visa cardholders pay more than $31 in interest is:

P(X > 31) = (\frac{X-29}{9}>\frac{31 -29}{9}) = P (Z > 0.22) = 1 - P (Z ≤ 0.22) =  

1 - 0.58706 = 0.41294 = 41.3%

The proportion of the bank's Visa cardholders pay more than 31 dollars in interest is 41.3%.

b) The proportion of the bank’s Visa cardholders pay more than $31 in interest is:

P(X > 41) = (\frac{X-29}{9}>\frac{41 -29}{9}) = P (Z > 1.33) = 1 - P (Z ≤ 1.33) =  

1 - 0.90824 = 0.09176 = 9.176% ≈ 9.18%

The proportion of the bank's Visa cardholders pay more than 31 dollars in interest is 9.18%.

c) The proportion of the bank’s Visa cardholders pay more than $31 in interest is:

P(X > 19) = (\frac{X-29}{9}>\frac{19 -29}{9}) = P (Z < -1.11) = 1 - P(Z ≤ -1.11)) =0.13350 = 13.35%

The proportion of the bank's Visa cardholders that paid less than 19 dollars in interest is 13.35%.

d) Let's suppose this amount of payment is Y:

Therefore P(X > Y) = 0.18

so P(X < Y) = 0.82

Utilizing standard normal approximation

P(X ≤ Y) = (\frac{X-29}{9}\leq \frac{Y -29}{9}) = P (Z ≤ \frac{Y-29}{9})  =  0.82

Form the standard normal table we find that \frac{Y-29}{9} = 0.92

Therefore,

Y - 29 = 9×0.92

Y - 29 = 8.28

Y = 8.28 + 29 = 37.28

Therefore $37.28 of interest payment is exceeded by only 18% of the bank's Visa cardholders.

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Answer: By creating risk pools, insurance companies help spread the risk and avoid the type of massive payout required after a catastrophic loss. It is a form of risk management for insurance companies. If a claim is made for reimbursement due to that catastrophic loss, the participating insurance companies spread the loss among themselves.

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Garcia manufacturing's april sales forecast projects that 5,000 units will sell at a price of $10.50 per unit. the desired endin
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neonofarm [45]

c.

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false

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3 years ago
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A machine cost $1,238,000 on April 1, 2020. Its estimated salvage value is $139,200 and its expected life is 4 years. Calculate
natulia [17]

Answer:

  • The depreciation expense by straight-line for 2020: $206,025
  • The depreciation expense by double-declining balance for 2021: $619,000
  • The depreciation expense by sum-of-the-years'-digits for 2021: $329,640

Explanation:

Under straight-line method, depreciation expense is (cost - residual value) / No of years = ($1,238,000 - $139,200) / 4 years = $274,700 yearly depreciation expense.

Depreciation expense by straight-line for 2020 will be (April 1, 2020 - Dec. 31, 2020):  $274,700 / 12 x 9 = $206,025.

The double-declining method is otherwise known as the reducing balance method and is given by the formula below:  

Double declining method = 2 X SLDP X BV

SLDP = straight-line depreciation percentage

BV = Book value

SLDP is 100%/4 years = 25%, then 25% multiplied by 2 to give 50% or simply 1/2

Depreciation expense under double-declining method at December 31, 2021: $1,238,000 x 1/2 = $619,000

Under the sum-of-the-years'-digits, the depreciation expense for 2021 will be calculated as follows: 3 / 10 = 30%.

10 was derived by 4 + 3 + 2 + 1 for Year 2020, 2021, etc

($1,238,000 - $139,200) x 30% = $329,640

4 0
3 years ago
Need answer like, fast.
grigory [225]

Answer:

D

Explanation:

7 0
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