Check the Z table for 97.5% to the left -> Z = 1.96 Because normal distribution is symmetric, the Z score on the left hand side is -1.96 Use the formula x = u + Z* Therefore, the upper limit is 5,000 + 1.96*1500 = 7,940 and the lower limit is 5,000 1.96*1500 = 2,060 So we have 95% confidence that losses will fall between 2,060 and 7,940.

How do you get Z = 1.96? (Please explain)