Question

The recent economic recession caused a plunge in new cars sales from 2008 to 2010. This trend resulted in a significant shortage of used cars during the next few years which, in turn, pushed up used car prices. Suppose that the average price of a 5 year old used car is $ 16,230 with a standard deviation of $ 4,740. Assume that the price of a 5 year old used car follows the normal probability distribution.
a. What is the probability that a randomly selected 5 year old car costs
1. Less than $ 18,500?
2. More than $ 11,300?
3. Between $ 10,000 and $ 14,000?
4. Between $ 12,500 and $ 17,000?
b. Use Excel or PHStat to confirm the answers in part a.
c. What is the cost of a 5 year old car in the 90th percentile?


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  • CreatedJuly 17, 2015
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