Question

John Reynolds, an auditor for a large credit card company, knows that, on average (μ), the monthly balance of any given customer is $112, and the standard deviation (σ) is $56. If John audits 50 randomly selected accounts, what is the probability that the sample average monthly balance is less than $100?

Answer 1

Solution :

Given that ,

mean = = $112

standard deviation = = $56

= / n = 56 / 50 = 7.9196

P( < $100) = P(( - ) / < (100 - 112) / 7.9196)

= P(z < -1.5152)

= 0.0649

Probability = 0.0649