Question

A construction company in Naples, Florida, is struggling to sell condominiums. In order to attract buyers, the company has made numerous price reductions and better financing offers. Although condominiums were once listed for $300,000, the company believes that it will be able to get an average sale price of $191,000. Let the price of these condominiums in the next quarter be normally distributed with a standard deviation of $17,000. [You may find it useful to reference the z table.]

a. What is the probability that the condominium will sell at a price (i) Below $175,000?, (ii) Above $218,000? (Round "z" value to 2 decimal places and final answers to 4 decimal places.)

b. The company is also trying to sell an artist’s condo. Potential buyers will find the unusual features of this condo either pleasing or objectionable. The manager expects the average sale price of this condo to be the same as others at $191,000, but with a higher standard deviation of $20,000. What is the probability that this condo will sell at a price (i) Below $175,000?, (ii) Above $218,000? (Round your answers to 4 decimal places.)

Answer 1

Answer PART 1

(A) It is given that  mean = 191000 and standard deviation = 17000

P(less than 175000) =

putting values, this implies

..........{using z distribution table}

(B) It is given that  mean = 191000 and standard deviation = 17000

P(more than 218000) =

putting values, this implies

..........{using z distribution table}

Answer PART 2

(A) It is given that  mean = 191000 and standard deviation = 20000

P(less than 175000) =

putting values, this implies

..........{using z distribution table}

(B) It is given that  mean = 191000 and standard deviation = 20000

P(more than 218000) =

putting values, this implies

..........{using z distribution table}