Question

A person ‘X’ earns $80,000 year. The mean income of all individuals of the country is $50,000 and standard deviation is $10,000. When the person’s father, individual ‘Y’, was around the same age he was making $30,000 a year and at that time the average income of the country was $15,000 and standard deviation was $7,500. Compute the ‘Z’ score for both the individuals and identify who is doing better. Show all calculation for points.

Answer 1

Solution :

Given that ,

mean = = 50000

standard deviation =  = 10000

x = 80000

Using z-score formula,

z = x - /   

z = 80000 - 50000 / 10000

z = 3.00

mean = = 15000

standard deviation =  = 7500

y = 30000

Using z-score formula,

z = y - /   

z = 30000 - 15000 / 7500

z = 2.00

X is better than Y, because X z-score bigger than Y z-score