Sean wants to buy a friend’s car, but he does not have the $3,000 that his friend is asking. He has $2,500 and is considering bo
1 answer:
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Answer:
a) Income of $272,428 or more would be top 1%.
b) Skewed right
c) Not always normally distributed
Explanation:
We are given the following information in the question:
Mean, μ = $77,044
Standard Deviation, σ = $84,000
Median = $58,423
a) We follow a normal mode
Formula:
We have to find the value of x such that the probability is 0.01
P(X > x)
Calculation the value from standard normal z table, we have,
Thus, income of $272,428 or more would be top 1%.
b) We should not be confident as the median is not equal to the mean. Hence, it is not a normal distribution. It was just an assumption. Since the mean is greater than the median the distribution of income is skewed towards right.
c) Normal model not be a good one for incomes because the median may not always e equal to the mean and hence, they do not follow a normal distribution.