A new phone system was installed last year to help reduce the expense of personal calls that were being madeby employees. Before the new system was installed, the amount being spent on personal calls follows a normaldistribution with an average of $800 per month and a standard deviation of $50 per month. Refer to suchexpenses as PCEʹs (personal call expenses). Find the point in the distribution below which 2.5% of the PCEʹsfell.
A) $702.00
B) $898.00
C) $20.00
D) $780.00

Question

Quizplus · Accepted Answer

The point below which 2.5% of the data falls in a normal distribution is the 2.5th percentile, which corresponds to approximately 1.96 standard deviations below the mean. Calculating this: $800 - (1.96 * $50) = $702.00.

A New Phone System Was Installed Last Year to Help