Before a new phone system was installed, the amount a company spent on personal calls followed a normal distribution with an average of $700 per month and a standard deviation of $50 per
Month. Refer to such expenses as PCEʹs (personal call expenses). Find the probability that a
Randomly selected month had PCEʹs below $550.
A)0.7857
B)0.2143
C)0.9987
D)0.0013

Question

Quizplus · Accepted Answer

To find the probability that a randomly selected month had PCE's below $550, we use the Z-score formula: Z = (X - μ) / σ, where X is the value of interest ($550), μ is the mean ($700), and σ is the standard deviation ($50). Plugging in the values gives Z = (550 - 700) / 50 = -150 / 50 = -3. A Z-score of -3 corresponds to a probability of approximately 0.0013 in the standard normal distribution table.

Before a New Phone System Was Installed, the Amount a Company