Professors at a local university earn an average salary of $80,000 with a standard deviation of $6,000. With the beginning of the next academic year, all professors will get a 2% raise. What will be the average and the standard deviation of their new salaries?
A) $80,000 and $6,120.
B) $81,600 and $6,000.
C) $81,600 and $6,120.
D) $82,000 and $6,200.

Question

Quizplus · Accepted Answer

To find the new average salary, we simply multiply the old average salary by 1.02 (since everyone is getting a 2% raise). 
New average salary = $80,000 * 1.02 = $81,600

To find the new standard deviation, we need to use the formula: 
New standard deviation = old standard deviation * 1.02

New standard deviation = $6,000 * 1.02 = $6,120

Thus, the answer is option C, $81,600 and $6,120.

Professors at a Local University Earn an Average Salary of $80,000