Statisti for Busines

STAT130
cs
s

Unit 2: Probability and Random

Variables

Chapte 4
r

Probability

Basic

Experiment

Concepts
A process of observation whose outcome is

not known in advance with certainty.

e.g. Single throw of a 6-sided die.

Sample space (S)

Set of all possible outcomes of the experiment.

e.g. S = {1,2,3,4,5,6}

Event

A collection of outcomes; a subset of S.

e.g. A={2,4,6}, B={3}.
3

Event
Union of A and B (A B)
Operations
outcomes that belong to either A or B or

both.

Intersection

of A and B (A B)
that belong to both A and B.

Complement
()
outcomes
All outcomes in S that are not in the particular
event.
Mutually Exclusive Events
A and B are mutually exclusive i.e. (disjoint) if

(A B)=.
4

Venn Diagram
s

Tre diagra
This is a useful device to build a sample space
e and to
m calculate probabilities of simple events
and events.

Example: A automobile consultant records fuel type

and vehicle type for a sample of vehicles; 2 Fuel types
Gasoline, Diesel) and 3 Vehicle types (Truck, Car,
SUV)

Car

e1
e2

e3
Car

e4
e5
e6
6

Exercis

Suppose

sequence

three fuses are examined in

and each receive a pass (P) or
fail

as a result of this inspection.

(F)Construct
rating
1.
a tree diagram to show the
outcomes of the experiment.
2. Write down the sample space.
3. Let A denote the event that exactly one fuse
fails inspection. How would A be defined?
4. Let E denote the event that at most one fuse
fails inspection. What is ? A and E? A or E?
7

Probabilit
Probability refers
y

to the chance that a particular

event will occur.

The probability of an event is the proportion of
times the event is expected to occur in repeated
experiments.
Let A be an event, then P(A) denotes the
probability that A will occur.

Assigning

Classical Method

Assigning probabilities based on the assumption of

equally likely outcomes.

Probabilities
P(Ai) =

Number of ways Ai can occur

Total number of elementary events

Relative Frequency Method

Assigning probabilities based on experimentation or

historical data.
Relative Freq. of Ai =

Number of times Ai occurs

Subjective Method

Assigning probabilities based on the

assignors
judgment.

Exercise

1. A quiz contains multiple-choice questions

with five possible answers, only one of which
s is correct. A student plans to guess the
answers because he knows absolutely
nothing about the subject.
a) Produce the sample space for each question
b) Assign probabilities to the simple events in
the sample space you produced.
c) Which approach did you use to answer part b.
d) Interpret the probabilities you assigned in
part b.
10

Exercis

2. The manager of a computer store has kept track

of the number of computers sold per day. On
e the basis of this information, the manager
number of
produced the following list of

the

daily
sales:
a)
Which
approach did the manager
use to assign the probabilities.
b) What is the probability of selling
2, 3 or 4 computers?
c) What is the probability of selling
6 computers?

Number of
Computers
Sold

Probability

.08

.17

.26

.21

.18

.10

11

Rule of Probabilit
s

Rules for
Possible Values
and Sum

Individual Values

Sum of All Values

k

0 P(Ai) 1

P(A ) 1

For any event Ai

i1

where:
k = Number of elementary events
in the sample space
Ai = ithelementary event

12

Complement

The complement of an event A is the

collection of all possible elementary events
Rule
not contained in event A. The complement of

event E is represented

by .

Complement Rule:

P(A) 1
P(A)

Or,

P(A) P(A)
1

13

The Addition

If A and B are not mutually exclusive:

Rule P(A B) = P(A) + P(B) P(A B)
If A and B are mutually exclusive, then the
probability that A or B (the union of A and

B)will occur is
P(A B) = P(A) + P(B)

General addition Rule for mutually exclusive

events:
If A1, A2,, AN are mutually exclusive, then
P(A1 A2 AN) = P(A1) + P(A2) ++ P(AN)
14

Example: Newspaper

Define events:

A = event that a randomly selected household

subscribes to the Atlantic Journal
B = event that a randomly selected household
subscribes to the Beacon News

Subscribers

Given:

total number in city, N = 1,000,000

number subscribing to A, N(A) = 650,000
P(A)=0.65
to B, N(B) = 500,000
number
subscribing
to both, N(AB) = 250,000
P(B)=0.50
number
subscribing
P(A B)=0.25

15

Example: Newspaper

What is the probability that a household

subscribes to either newspaper?

Subscribers

P (A B ) = P (A )+ P (B ) P (A
B)
0.65 0.50 0.25 0.90

does not

What is the probability that a household

subscribe Pto(A
Atlantic
) = 1 Journal?
P (A)

1 0.65
0.35

16

Exercise

1) A student is randomly selected from a class

where 35% of the class is left-handed and 50%
s are sophomores. We further know that 5% of
class consists of left-handed sophomores.
the
What is the probability of selecting:
a) a student that is either left-handed OR a
sophomore?
b) a right-handed sophomore?
c) Are the events of selecting a left-handed student
and selecting a sophomore considered to be
mutually exclusive? Why or why not?

17

Exercise

2) 42% of the sales force at a large insurance

company have laptop computers, 65% have

desk computers and 24% have both types of

computer. A sales person is selected at

random.
a) What is the probability that he/she does not
have a laptop computer?
b) What is the probability that he/she has at
least one of the two types of computer?

18

Conditional

The probability of event A occurring, given

event B has occurred, is called the
that
Probability
conditional probability of event
given event

B, denoted

P(A|B):

P(A|B)

P(A B)

P(B)

where P(B)>0
Multiplication Rule:
P(A B)=P(A|B)P(B)

19

Example: Newspaper

Of the households that subscribe to the Atlantic

Journal, what is the probability that they also
Subscribers
subscribe to the Beacon News?

P A B

0.25
0.3846
P B | A
0.65
P A
Of the households that subscribe
the Beacon
News, to
what is the probability t hat they also
subscribe to the Atlantic Journal?
P A | B

P AB
P B

0.25
0.50
0.50
20

Exampl

Of the cars on a used car lot, 70% have air

conditioning (AC) and 40% have a CD player (CD).
20% of the cars have both. What is the probability
that a car has a CD player, given that it has AC ?

CD

No CD

Total

AC

.2

.5

.7

No AC

.2

.1

.3

Total

.4

.6

1.0

P(CD | AC)

P(CD and AC)

P(AC)

.2

.2857
.7

21

Exercis

The following table gives the classification of the

amount paid and the method of payment at a
department store.
Cash

Credit
Card

Debit Card

Under $20

.09

.03

.04

$20-$100

.05

.21

.18

Over $100

.03

.23

.14

a) What proportion of purchase was paid by debit card?

b) Find the probability that a credit card purchase was
over $100
c) Determine the proportion of purchases made by
credit card or by debit card.
22

Independent vs.

Independent Events

Event

Occurrence of one does not

the
influence
probability of occurrence of the other
E1 = heads on one flip of fair coin
E2 = heads on second flip of same coin

Dependent

Dependent Events

Occurrence of one affects the probability of the

other
E1 = rain forecasted on the news
E2 = take umbrella to work
23

Independent

If A and B are independent events then:

P(A|
Events
B)=P(A)

where P(B)>0

where P(A)>0
P(B|
P(A B)=P(A) P(B)
A)=P(B)

In general, if A1, A2, , Ak are k jointly

independent events then
P(A1 A2 Ak)=P(A1)

P(A2).P(Ak)

24

Example 1: Newspaper

Of the Atlantic Journal subscribers, what is

the chance that they also subscribe to the

Subscribers

Beacon News?
If independent, the P(B|A) = P(A)

P(B|A) = P(A)

A)?
Is Know that P(A)=

= 0.65
Just calculated t
6
hat P(B|A) = 0.384
0.65 0.3846, so P(B|A) P(A)

is not independent of B
A and B are said to be dependent
25

Exampl 2

According to Bank One, 49% of U.S. small

businesses have Internet access. Of those
e businesses, 35% have their own web site.
Determine the probability that a randomly chosen
small business in US has Internet access and its
own web site.

Let E be the event that a small business has

1
internet access and E be the event a small
2
business has its own web site.
We have P(E1)=0.49 and P(E2|E1)=0.35, so
P(E1 E2)=P(E2|E1)P(E1)=(0.35)(0.49)=0.1715
26

Example

About 13% of the population is left-handed. If

two people are randomly selected, what is the
3 probability both are left-handed? What is
the
probability at least one is right-handed?

Let E1 be the event that the first selected person is

second
a left-handed and E be the event that the
2

selected person is a left-handed.

We have P(E1)=P(E2)=0.13, so
P(E1E2)=P(E1)P(E2)=(0.13)(0.13)=0.0169
P(At least one is right-handed)=1- P(E1E2)
1 - = 0.0169 0.9831
27

Example
The personnel

department of an insurance
company has compiled data regarding promotion,
4 classified by gender. Is promotion and gender
dependent on one another?
Manager

Promoted (E)

Not promoted ()

Total

Male (A)

46

184

230

Female ()

Total

54

32

216

40

270

Let us check if P(E|A)=P(E). If this equality

holds, there is no difference in probability of
promotion between a male and a female
manager.

28

Exampl 4
e

Manager

Promoted (E)

Not promoted ()

Total

Male (A)

46

184

230

Female ()

Total

54

32

216

40

270

P(E) = Number of promotions / total number of

managers =

54/270 = 0.20

P(E|A) = Number of promotions | Only male

managers are observed = 46 / 230 = 0.20.

Conclusion: there is no discrimination in

awarding

promotions.
29

Exercise
1.

A committee consists of four women and three

men. The committee will randomly select two
people to attend a conference.

a) Find the probability that both are women.

b) Find the probability that a man and a woman will
be selected.

2.

3.

20% of the applications received for a particular

position are rejected. What is the probability
that among the next 10 applications at least
one will be rejected?
If A and B are independent events such P(A)=
0.6 and P(B) = 0.2, find P(A B).
30

Exercise
4. A family
s

recently purchased two identical

notebook computers. The Reference and
Troubleshooting Guide suggests that with
no
power management features enabled, there is a
70% chance that the operating time will exceed

2.8 hours. Assuming no power management

features are enabled, find the probability that
a) both computers will have an operating time
that exceeds 2.8 hours.
b) at least one of the two computers will have an
operating time that exceeds 2.8 hours.
31

Chapte 5
Discrete Random Variables

Random Variables:

A random variable is a variable that assigns a

numerical value to each outcome of a random
Definitions
experiment or trial.
Discrete random variable: Possible values can
be counted or listed

The number of defective units in

batch of 20

in a computer lab.

Number of available computers

The waiting time for a credit card authorization

The interest rate charged on a business loan

Continuous random variable: May assume any

numerical value in one or more intervals

33

Discrete Probability

The probability distribution of a discrete

random variable is a table, graph or formula
Distributions
that gives the probability associated with each
possible value that the variable can assume

Notation: Denote the values of the random

variable by x and the values associated
probability by p(x).

Properties of Discrete Probability

Distribution

1.
value x of of
theall
random
variable,
p(x)sample
0
2. For
The any
probabilities
the events
in the
space must sum to 1, that is p(x)=1
34

Example
Experiment: Toss 2 Coins.

T
T

T
H

Probability Distribution
x
x Value

Probability

0.1/4 = 25

0.50= 2/4

0.25 = 1/4

Probability

4 possible outcomes

Let x = # heads.

.50
.25

35

Example

Let x be the random variable of the

2 number of radios sold per week

Number of Radios Sold at Sound City

in a Week

Radios, x
0
1
2
3
4
5

Probability,
p (x )
p(0) = 0.03
p(1) = 0.20
p(2) = 0.50
p(3) = 0.20
p(4) = 0.05
p(5) = 0.02
1.00

36

Exampl

What is the chance that two radios will be sold in

a week?

What is the chance that fewer than 2 radios will

p(X = 2) = 0.50

be sold in a week?

p(X < 2)

= p(X = 0 or X = 1)
= p(X = 0) + p(X = 1)

= 0.03
+ 0.20
= 0.23
What is the chance
that
three
or more radios will

be sold in a week?

p(X 3 )

= p(X = 3, 4, or 5 )
= p(X = 3) + p(X = 4) + p(X = 5)
= 0.20 + 0.05 + 0.02 = 0.27

37

Exercise

1. Determine whether each of the following is valid

probability

distribution.

p(x)

.1

.3

.4

.1

10

p(x)

.01

.01

.01

.97

2. Roll two dice and let X be the sum of the two

numbers. Find and graph the probability
distribution of X. Comment on the distribution.
38

Mean, Variance and Standard

Let X be a discrete random variable with set
of k possible values and probability
Deviation
distribution p(x):

The

The

expected value or mean of X is

x =xp(x)
variance of X, denoted is2
x
x2 =(x- ) 2p(x)
x

standard deviation of X, denoted is the

x
The
positive square root of the variance.

39

Exampl

The total number of cars to be sold next week is

described
by
the 1
following
probability
distribution
x
0
2
3
4
P(x)

0.05

0.15

0.35

0.25

0.20

Determine the expected value and standard

deviation of X, the number of cars sold.

x=0(.05)+1(.15)+2(.35)+3(.25)+4(.20)
=2.40
2
2
2
2
x =(0-2.4) (.05)+(1-2.4) (.15)+(2-2.4)
(.35+(3-2.4)2 (.25)+(4-2.4)2(.20) =1.24
x=1.11

40

Exercise

1. A chemical supply company currently has in stock

100 lb of a certain chemical, which it sells to
customers in 5-lb lots. Let X = the number of lots
ordered by a randomly chosen customer, and
suppose that X has probability distribution:

p(x)

0.2

0.4

0.3

0.1

Compute the mean and the variance of X.

2. An insurance company will insure a $75,000
Hummer for its full value against theft at a premium
of $1500 per year. Suppose that the probability that
the Hummer will be stolen is 0.0075. Calculate the
insurance company's expected net profit.
41

The Binomial

The binomial experiment:

1. Experiment consists of n identical trials

Distribution
(Bernoulli trials)

2. Each trial results in either success or

3. failure
Probability of success, p, is constant from trial
4. to trial (The probability of failure, q, is 1 p)

If Trials are independent

x isof
the
total number
of successes
na
trials
a binomial
experiment,
then in
x is
binomial random variable

42

Example

A manufacturing plant labels items as either

defective or acceptable.

s
A firm bidding for a contract will either get the

contract or not.
A marketing research firm receives survey
responses of yes I will buy or no I will not.
New job applicants either accept the offer or
reject it.
The network works or does not work.

43

Binomial
For a binomial

random variable x, the

probability of x successes in n trials is given
by the binomial distribution:
distribution

n!
x n x
p (x )
p
(n x )! x ! q

for x 0,1, ,
n

n! is read as n factorial and

n! = n (n-1) (n-2) ... 1

If x is a binomial random variable with

parameters n and p (so q = 1 p), then

The mean x= np

The variance x2= npq

44

Binomial Distribution:
Applets
How does it look?
Binomial Probabilities

45

Sever Binomia Distribution

al

46

Finding probabilities in

If X has Binomial dist with parameters (n, p), then:

P(X = k) can be obtained from Excel by typing in an

empty cell =binomdist(k, n, p, false) and returning.
P(X k) can be obtained from Excel by typing in an
empty cell =binomdist(k,

EXCEL

n, p, true) and returning.

MegaStat:

Distributions

Choose Binomial and enter the values of n and p

Click in the Display Graph if the plot of the distribution is
desired.
Click OK and the output will be given.

In MegaStat Probability Discrete Probability

47

Exampl

Records show that 30% of the customers in a

shoe store make their payments using a credit
card. This morning 20 customers purchased
shoes.

a) What is the probability that 12 customers used a

credit card?

This is a binomial experiment with n=20 and

p=.30.

P (X 12) 20! (0.30)12 (0.70)8 0.0039

8!12!
In Excel, =BINOMDIST(12,20,0.3,0)
48

Exampl

b) What is the probability that at most 7 customers

used a credit card?

20!
20!
0
20
(0.3) (0.7)
(0.3) 7 (0.7)13
0! 20!
7!13!
0.7723

P (X 7)

In Excel, =BINOMDIST(7,20,0.3,1)
b) What is the expected number of customers who
used a credit card?

x=np=(20)(0.3)=6 customers
49

Example MegaSt Outpu

:

at

50

Exercise

1. A
salesperson
contacts
eight
potential
customers per day. From past experience, we
s know that the probability of a potential
customer making a purchase is 0.10.
a) What is the probability the salesperson will make
b)

exactly two

sales in a day?

will make
What is the probability the salesperson
at least two sales in a day?
c) What percentage of days will the salesperson not
d)

make a sale?

What is the expected number of sales per day?

51

Exercise

2. Of the customers purchasing laptops, 75%

purchase a Dell model. Let X= the number
s among the
15 purchasers who select
next
the Dell model.
a)
b)
c)
d)

What is the pmf of X?

Compute P(X<10 and P(6 X 10).
Compute themean and the variance of X.
If the store currently has in stock 10 Dell
models and 8 Compaq models, what is
the
probability that the requests of these
customers can all be met from existing stock?15
52

Chapter
Continuous Random Variables

Continuous Probability

A continuous random variable may assume

any numerical value in one or more intervals
Distributions
Use a continuous probability distribution to
assign probabilities to intervals of values
Examples:
Age of an employee
time required to complete a task
height, in inches

These can potentially take on any value,

depending only on the ability to measure
accurately.
54

Probability
The probability distribution of a continuous
random variable is specified by a function, f(x),
such that:
distribution

f(x) 0 for all x

The total area under the curve of f(x) is equal to 1.

The function f is called the probability curve of

the probability density function (pdf).
Distribution Shapes:
Symmetrical rectangular (The uniform
and distribution)

Symmetrical bell-shaped (The normal
and distribution)
either left or right)
Skewed
(Skewed

55

Area and

X is continuous, then

If The blue area under the curve f(x) from x = a to x

Probability

is the probability that x could take any value

in
=b
the range

a to b

P(X = a)= 0 for any number a.

P(X>a)=1-P(X<a)
P(a X b)=P(a < X < b)=P(X<b)-P(X<a)

56

Uniform
A random variable X is said to be uniformly
distributed over the interval (c, d) if its
Distribution

density function is

f (x )

1
cx d
d c

The expected value and the variance of the

are:

uniform distribution

X c d
2

2
X

(d

c )12

2
57

The Unifor Probabilit Curv

m

58

Exampl

The amount of time it takes for a student to

complete a statistics quiz is uniformly
distributed between 30 and 60 minutes.
The pdf is given by
0.03
5

0.03
0

f x = 30
0

for 30 x 60

0.02
0

Densit
y

0.02
5

0.01
5

otherwise

0.01
0
0.00
5
0.00
0

30

60

59

Exampl

a) One student is selected at random. Find the

probability that the student requires more

than 55 minutes to complete the quiz.

P(X>55) = (60-55)/(60-30)=0.167
0.03
5

0.167

0.03
0
0.02
5
0.02
0

Densit
y

0.01
5
0.01
0
0.00
5
0.00
0

30

55

60

60

Exampl

b) One student is selected at random. Find the

probability that the student requires 45 to
e 55 minutes to complete the quiz.
P(45<X<55) = (55-45)/(60-30)=0.3333
0.03
5

0.333

0.03
0
0.02
5
Densit
y

0.02
0
0.01
5
0.01
0
0.00
5
0.00
0

30

45
X

55

60

61

Exampl

c) Find the expected value and the variance of

the amount of time it takes a
student to
e complete a statistics quiz.

The

The

expected value is:

x=(30+60)/2=45
variance is:
2
x 2=(6030) /12 =75

62

Exercis

The length of time patients must wait to see a

doctor in a local clinic is uniformly distributed
between 15 minutes and 2 hours.
a) What is the probability of a patient waiting
b)

exactly 50 minutes?

What is the probability that a patient would

have to wait between 45 minutes and 2 hours?
c)
Compute the probability that a patient would
have to wait over 2 hours.
d)
Determine the expected waiting time and its
standard deviation.
63

The Normal

is the most important continuous distribution:

It Many random variables can be properly modeled as

normally distributed.
Distribution

Many distributions can be approximated by a normal

distribution.
The normal distribution is the cornerstone distribution
of statistical inference.

A random variable X with mean and variance is

normally distributed, abbreviated by N(, ), if its
probability density function is given by

f (x)

e (1/ 2)[( x ) / ]

64

Properties of Normal

Bell Shaped and Symmetrical

Mean=Median=Mode
Distribution

Spread is determined by

Location is determined by

The total area under the curve is 1.

It has two tails extending

- to +
from
A random variable has a standard normal
distribution provided that it follows N(0, 1).

65

Man Norma Distribution

y

By varying the parameters and , we obtain

different distributions

Changing shifts the distribution left or right.

Changing increases or decreases the spread.
66

Empirical Rule: 3 Important

What can we say about the distribution of values

around the mean? There are some general rules:
Percentages
covers about 68.26% of xs
2 covers about 95.44% of xs
3 covers about 99.74% of xs

67

Exampl
Ali collected data on the

heights of women ages

e 18 to 24. He found that
the
distribution
was
roughly normal, with a
Mean of 64.5 inches
standard
and
a
deviation of 2.5 inches.
The three percentages
marked on the
are
graph.
68

Finding
Normal
Two facts help calculate normal probabilities:
The normal distribution is symmetrical.
Any normal
can be transformed into
distribution
the STANDARD NORMAL DISTRIBUTION.

Probabilities

Every normal variable with mean and standard

deviation , can be transformed to

Z is distributed as N(0, 1).

z measures the number of standard deviations
that x is from the mean
69

The Standar Norma

d

70

Finding Normal

To find P(a<x<b) when x is distributed normally:

Translate x-values to z-values
Probabilities

the Standard Normal Table

Use

71

The Standard

Tabl

The standard normal

table is a table that lists
the area under the
standard normal curve
below (to the left of) the
z value of interest,
i.e.
P(Z<z).

Normal

0.4
0.977

Example:
P(Z <
2.00)

0.3

= 0.9772

0.2

0.1

0.0

72

exampl

Suppose x is normal with mean 8.0 and

deviation 5.0. Find P(8 < x < 8.6)

standard e
Table

=8
=5

8 8.6

P(8 < x < 8.6)

=0
=1

0 0.12

.0478

P(0 < z < 0.12)

73

Finding Normal
Probabilities
deviation 5.0.

Find P(x < 8.6)

P(x < 8.6)=
P(z< 0.12) =
0.5478

Find P(x > 10)

P(x > 10) =
> 0.0.40)
P(z
= 1-P(z < 0.40)
= 1- 0.6554
= 0.3446

0.0
9
0.0
8
0.0
7
0.0
6
0.0
5

Densit
y

Suppose x is normal with

mean 8.0 and standard

0.0
4
0.0
3

0.5478

0.0
2
0.0
1
0.0
0

8.6

0.0
9
0.0
8
0.0
7
0.0
6
0.0
5

Densit
y

0.0
4
0.0
3
0.0
2

0.345

0.0
1
0.0
0

8
10

74

Finding probabilities in

For Standard normal distribution:

P(Z a) =normsdist(a)

Excel
For normal distribution with mean and standard
deviation :

P(X a) =normdist(a, , , 1)

MegaStat:

Choose normal and enter the values of and

Enter the value of x is the Calculate p given x window
Click Preview to see the probability below and above x
or OK to produce the output.

In Probability Continuous Probability Distributions

Note: You can also use Probability Normal distribution

for computations and graphs.
75

Backward Normal

We could find the observed value (x) of a given

proportion in N(, 2) by unstandardizing the z-

Calculations
value.

State the problem

Draw a picture
Use the normal table to find
probability
the
closest
to the one you need and read off the zvalue

Unstandardize x=

+ z

76

Exampl

Find the z-score that

corresponds to a cumulative

e area of 0.3632.

0.3

Densit
y

0
0.4

0.2

P(Z<z)=0.3632
z=-0.35
Find the z-score that has
10.75% of the distributions
area to its right.

P(Z>z)=0.1075
z=1.24

0.0

0.3632

-0.350
0

0
0.
4

0.
3
Densit
y

0.1

0.
2

0.
1
0.1075
0.
0

1.2
4

77

Finding quartiles in

The value of c such that P(Z c) = , with known,

Excel

can be obtained c=normsinv(.

with known,
The value of c such that P(X c) = ,
can be obtained c=norminv(, , ).
MegaStat:
In Probability Continuous Probability Distributions

Choose normal and enter the values of and

Enter the value of x is the Calculate x given p window

Click Preview to see the desired quartile or OK to
produce the output.

Note: You can also use Probability Normal distribution

for computations and graphs.
78

Exampl
If X has Normal distribution with =60 and =4, then
e

P(X 68) = 0.97725

by typing in EXCEL =normdist(68, 60, 4, 1)
P( 54 < X < 65) = P( X < 65) P(X 54)=
0.8944 0.0668 = 0.8276
by typing
=normdist(65,60,4,1)-normdist(54,60,4,1)
P(X > 68) = 1 P(X 68) = 1 0.9773 = 0.0227
by typing in EXCEL =1- normdist(68,60,4,1)

The value of c such that P(X c) = 0.99 is c = 69.31

by typing in EXCEL =norminv(0.99, 60, 4)

79

Example

1) A survey was conducted to measure the number

of hours per week adults spend on home
s computers. In the survey, the number of hours
were normally distributed, with a mean of 7
hours and a standard deviation of 1 hour. Find
the probability that the hours spent on the
home computer by the participant are less than
4.5 hours per week.
P(X<4.5)=P(Z<-2.5)=0.0062
In Excel, =NORMDIST(4.5, 7, 1,
1)
80

Example

2) A person must score in the upper 2% of the

population
to qualify
on
an
IQ test
for
s membership in Mensa, the international high-IQ
society. If IQ scores are normally distributed
with a mean of 100 and a standard deviation of
15, what score must a person get to qualify for
Mensa?

P(Z > z) = .02 or P(Z < z) = 1 - .02 =

.98

From the normal table, z = 2.05

x = +z = 100 + 2.05 (15) = 130.75

In Excel, =NORMINV(0.98,100,15)
81

Exercise
1) The average
s

price of personal computers

manufactured by MNM Company is $1,200 with
a standard deviation of $220. Furthermore, it is
known that the computer prices manufactured
by MNM are normally distributed.

a) Computers with prices of more than $1,750

receive a discount.
What percentage of the
computers will receive the discount?
b) What are the minimum and the maximum values
of the middle 95% of computer prices?
c) If 513 of the MNM computers were priced at or
below $647.80, how many computers were
produced by MNM?
82

Exercise

2) The monthly utility bills in Al-Ain are normally

distributed, with a mean of 400 Dhs and a
standard deviation of 50 Dhs.

a) Find the probability that a selected utility bill is

between 300 Dhs and 450 Dhs.
b) What is the 95th percentile of the utility bills?
c) What is the first quartile of the utility bills??

3) A manufacturing process produces items whose

weights are normally distributed. It is known that
22.57% of all the items produced

weigh between

100 grams up to the mean and 49.18% weigh

from the mean up to 190 grams. Determine the
mean and the standard deviation.

83

Exercise

4) In a large section of a statistics class, the points for

the final exam are normally distributed with a
mean of 72 and a standard deviation of 9. Grades
are to be assigned according to the following rule.

The top 10% receive As

The next 20% receive Bs

The middle 40% receive Cs

The next 20% receive Ds

The bottom 10% receive Fs

Find the lowest score on the final exam that would

qualify a student for an A, a

B, a C, and a D.
84