Question

suppose that prices of a certain model of new homes are normally distributed with a mean of 150,000. Use the 68-95-99.7 rule to find the percentage of buyers who paid between 150,000 and 154,200, if the standard deviation is 1,400. a.) 49.85% b.) 47.5% c.) 34% d.) 99.7%

Answer 1

49.85% of buyers paid between 150,000 and 154,200

The empirical rule states that for a normal distribution, 68% are within one standard deviation from the mean, 95% are within two standard deviation from the mean and 99.7% are are within three standard deviation from the mean.

Given that mean (μ) = 150000, standard deviation σ = 1400

68% are within one standard deviation = μ ± σ = 150000 ± 1400 = (148600, 151400)

95% are within two standard deviation = μ ± 2σ = 150000 ± 2 * 1400 = (147200, 152800)

99.7% are within three standard deviation = μ ± 3σ = 150000 ± 3 * 1400 = (145800, 154200)

The buyers who paid between 150,000 and 154,200 = 99.7%/2 = 49.85%

Hence 49.85% of buyers paid between 150,000 and 154,200

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