Question

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 2525 dollars and a standard deviation of 88 dollars. (Round all decimals to at least 3 places.) (a) What proportion of the bank's Visa cardholders pay more than 2828 dollars in interest

Answer 1

Complete Question

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 25 dollars and a standard deviation of 8 dollars. (Round all decimals to at least 3 places.) (a) What proportion of the bank's Visa cardholders pay more than 28 dollars in interest

Answer:

0.354

Step-by-step explanation:

We solve for z score in this question.

The formula is given as:

z = (x-μ)/σ, where

x is the raw score = $28

μ is the population mean = $25

σ is the population standard deviation = $8

z= 28 - 25/8

z = 0.375

P-value from Z-Table:

P(x<28) = 0.64617

P(x>28) = 1 - P(x<28)

= 1 - 0.64617

= 0.35383

Approximately to 3 decimal places = 0.354

The proportion of the bank's Visa cardholders pay more than 28 dollars in interest is 0.354.