A CD's sale price is $14. This is a 4% decrease from its original price. What was the original price?
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Answer:
The probability that <em>X</em> is less than 42 is 0.1271.
Step-by-step explanation:
The random variable <em>X </em>follows a Normal distribution.
The mean and standard deviation are:
E (X) = <em>μ</em> = 50.
SD (X) = <em>σ</em> = 7.
A normal distribution is continuous probability distribution.
The Normal probability distribution with mean µ and standard deviation σ is given by,
To compute the probability of a Normal random variable we first standardize the raw score.
The raw scores are standardized using the formula:
These standardized scores are known as <em>z</em>-scores and they follow normal distribution with mean 0 and standard deviation 1.
Compute the probability of (X < 42) as follows:
*Use a <em>z</em>-table for the probability.
Thus, the probability that <em>X</em> is less than 42 is 0.1271.
The normal curve is shown below.
