Because of the relatively high interest rates, most consumers attempt to pay off

Question

Because of the relatively high interest rates, most consumers attempt to pay off their credit card bills promptly. However, this is not always possible. An analysis of the amount of interest paid monthly by a bank's Visa cardholders reveals that the amount is normally distributed with a mean of 29 dollars and a standard deviation of 8 dollars. (a) What proportion of the bank's Visa cardholders pay more than 31 dollars in interest? Proportion = (b) What proportion of the bank's Visa cardholders pay less than 18 dollars in interest? Proportion =

Explanation / Answer

a) P(X > 31)

= P(z > (31 - 29)/8)

= P(z > 0.25)

= 0.4013

b) P(X < 18)

= P(z < (18 - 29)/8)

= P(z < -1.38)

= 0.0838

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