Question

A car salesman encourages you to buy a truck for $15,000. He claims that ninety percent...

A car salesman encourages you to buy a truck for $15,000. He claims that ninety percent of trucks similar to this one sell at prices higher than $15,000, and the average truck of this type sells for $30,000.

a) Assuming that the salesman is correct and that truck sale prices follow a normal distribution, find the standard deviation σ for the price distribution.

b) Now assume that the standard deviation obtained in part (a) is the correct value, but the true average sale price is only $25,000. In that case, what fraction of trucks sell at prices higher than $15,000?

Math   Statistics-And-Probability   
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Answer #1

Let X be a random variable representing the sale price of a truck.

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