Thang decided to borrow $6000 from his local bank to help pay for a car. His loan was for 3 years at a simple interest rate of
1 answer:
You might be interested in
Answer:
For a mean oil change time of 20.51 minutes there would be a 10% chance of being at or below
Step-by-step explanation:
To solve this question, we need to understand the normal probability distribution and the central limit theorem.
Normal probability distribution
Problems of normally distributed samples are 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.
Central Limit Theorem
The Central Limit Theorem estabilishes that, for a normally distributed random variable X, with mean and standard deviation
, the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean
and standard deviation
.
For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.
In this problem, we have that:
Treating this as a random sample, at what mean oil-change time would there be a 10% chance of being at or below?
This is the 10th percentile, which is X when Z has a pvalue of 0.1. So it is X when Z = -1.28.
By the Central Limit Theorem
For a mean oil change time of 20.51 minutes there would be a 10% chance of being at or below