When collecting debts, a debtor company rounds 60,000 debt contracts to the nearest ten dollars.

a) Stating any assumptions made, compute the probability that the total debt value collected will be altered by more than $500 from the original value (before rounding). No other information is provided. Show all details of your working.

b) Comment on should the debt collector company be worried that the amount altered with this rounding exceeds $2,000? Please explain your answer briefly.

Solve with it statistically using CLT or standardization.

Answer rating: 100% (QA)

Solution a As we are rounding the values to the nearest 10 here therefore for each of the 60000 obse... View the full answer