Question

The national mean cost of automobile insurance is $825 per year and the standard deviation of the costs is $225. In a sample of 36 automobile insurance policies, find the probability that the average cost of the 36 policies in the sample is within $50 of the national average. Round your answer to 3 decimal places.

Answer 1

Basically you're finding the probability between the numbers 775 and 875. because 825-50=775 and 825+50=875. Then you would plug those numbers into the z-score formula which is X-mu/sd where you should get + or - .2 and then find the probability that corresponds to .2 on the z score table and you should have your answer. At least that's what I would do, I dealt with normal distributions a few chapters ago.