Answer:
The 90th percentile for the distribution of the total contributions is $6,342,525.
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.
For sums of size n, the mean is
and the standard deviation is ![s = \sqrt{n}*\sigma](https://tex.z-dn.net/?f=s%20%3D%20%5Csqrt%7Bn%7D%2A%5Csigma)
In this question:
![n = 2025, \mu = 3125*2025 = 6328125, \sigma = \sqrt{2025}*250 = 11250](https://tex.z-dn.net/?f=n%20%3D%202025%2C%20%5Cmu%20%3D%203125%2A2025%20%3D%206328125%2C%20%5Csigma%20%3D%20%5Csqrt%7B2025%7D%2A250%20%3D%2011250)
The 90th percentile for the distribution of the total contributions
This is X when Z has a pvalue of 0.9. So it is X when Z = 1.28. Then
By the Central Limit Theorem
![X - 6328125 = 1.28*11250](https://tex.z-dn.net/?f=X%20-%206328125%20%3D%201.28%2A11250)
![X = 6342525](https://tex.z-dn.net/?f=X%20%3D%206342525)
The 90th percentile for the distribution of the total contributions is $6,342,525.