a. What percent of people earn less than $40000?
Solution: Let S be the random variable of a salary of employee (in $), S ~ N(50000,20000). Then the random
variable X =−50000
20000
~N(0,1).
( < 40000) = ( <
40000 − 50000
20000 ) = ( < −0.5) = (−0.5) = 0.3085375.
Here Φ(x) denotes the cumulative distribution function of a standard normal distribution.
Answer: 31%.
b. What percent of people earn between $45000 and $65000?
Solution:
(45000 < < 65000) = (
45000 − 50000
20000 < <
65000 − 50000
20000 ) = (−0.25 < < 0.75)
= (0.75) − (−0.25) = 0.7733726 − 0.4012937 = 0.3720789.
Answer: 37%.
c. What percent of people earn more than $70000?
Solution:
( > 70000) = ( >
70000 − 50000
20000 ) = ( > 1) = 0.8413447.
Answer: 84%.
