First, we are going to want to plug in the values we are given. In this case, we will end up with the equation:
From here, we can solve the equation to find :
We have found that c = 1.
Answer:
The probability that the shopkeeper's annual profit will not exceed $100,000 is 0.2090.
Step-by-step explanation:
According to the Central Limit Theorem if we have a population with mean <em>μ</em> and standard deviation <em>σ</em> and we select appropriately huge random samples (<em>n</em> ≥ 30) from the population with replacement, then the distribution of the sum of values of <em>X</em>, i.e ∑<em>X</em>, will be approximately normally distributed.
Then, the mean of the distribution of the sum of values of X is given by,
And the standard deviation of the distribution of the sum of values of X is given by,
The information provided is:
<em>μ</em> = $970
<em>σ</em> = $129
<em>n</em> = 102
Since the sample size is quite large, i.e. <em>n</em> = 102 > 30, the Central Limit Theorem can be used to approximate the distribution of the shopkeeper's annual profit.
Then,
Compute the probability that the shopkeeper's annual profit will not exceed $100,000 as follows:
*Use a <em>z</em>-table for the probability.
Thus, the probability that the shopkeeper's annual profit will not exceed $100,000 is 0.2090.