Question

Assume the cost of an extended 100,000 mile warranty for a particular SUV follows the normal distribution with a mean of $1200 and a standard deviation of $60. Complete parts.

a) Determine the interval of warranty costs from various companies that are one standard deviation around the mean. The interval of warranty costs that are one standard deviation around the mean ranges from

(Type integers or decimals. Use ascending order.)

b) Determine the interval of warranty costs from various companies that are two standard deviations around the mean.

The interval of warranty costs that are two standard deviations around the mean ranges from

(Type integers or decimals. Use ascending order.)

c) Determine the interval of warranty costs from various companies that are three standard deviations around the mean.

The interval of warranty costs that are three standard deviations around the mean ranges from.

(Type integers or decimals. Use ascending order.)

d) An extended 100,000 mile warranty for this type of vehicle is advertised at $1440. Based on the previous results, what conclusions can you make?

A. This warranty is better quality than warranties offered by competing companies due to the fact that it is more than three standard deviations above the mean.

B. The $1,440 cost of this warranty must be an error in the advertisement because a data value cannot be more than three standard deviations from the mean.

C. The $1440 cost of this warranty is slightly higher than average due to the fact that it is more than three standard deviations above the mean.

D. The $1440 cost of this warranty is much higher than average due to the fact that it is more than three standard deviations above the mean.

Answer 1

We have mean = 1200 and standard deviation = 60

a)

The interval of warranty costs that are one standard deviation around the mean ranges from 1140 to 1260

b)

The interval of warranty costs that are two standard deviations around the mean ranges from 1080 to 1320

c)

The interval of warranty costs that are three standard deviations around the mean ranges from 1020 to 1380

d)

Based on the previous results, conclusions you can make is  

C. The $1440 cost of this warranty is slightly higher than average due to the fact that it is more than three standard deviations above the mean.

Hope this will help you. Thank you :)