Data for a particular subdivision near downtown Houston indicate that the average price per square foot for a home is $100 with a standard deviation of $5 (normally distributed).What is the probability that the average price per square foot for a home is less than $85?
A)0.001
B)0.999
C)0.618
D)0.382

Question

Quizplus · Accepted Answer

To find the probability that the average price per square foot for a home is less than $85, we use the Z-score formula: Z = (X - μ) / σ, where X is the value in question ($85), μ is the mean ($100), and σ is the standard deviation ($5). Plugging in the values, we get Z = (85 - 100) / 5 = -15 / 5 = -3. Looking up a Z-score of -3 in a standard normal distribution table or using a calculator, we find the probability is approximately 0.0013, which rounds to 0.001, indicating a very low probability.

Data for a Particular Subdivision near Downtown Houston Indicate That