ASK YOUR TEACHER Time taken by a randomly selected applicant for a mortgage to fill out a certain form has a normal distribution with mean value 8 min and standard deviation 3 min. If five individuals fill out a form on one day and six on another, what is the probability that the sample average amount of time taken on each day is at most 11 min

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Answer:

On the first day, 98.75% probability that the sample average amount of time taken is at most 11 min.

On the second day, 99.29% probability that the sample average amount of time taken is at most 11 min.

Step-by-step explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

Normal probability distribution

Problems of normally distributed samples are solved using the z-score formula.

In a set with mean [tex]\mu[/tex] and standard deviation [tex]\sigma[/tex], the zscore of a measure X is given by:

[tex]Z = \frac{X - \mu}{\sigma}[/tex]

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.

Central Limit Theorem

The Central Limit Theorem estabilishes that, for a normally distributed random variable X, with mean [tex]\mu[/tex] and standard deviation [tex]\sigma[/tex], the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean [tex]\mu[/tex] and standard deviation [tex]s = \frac{\sigma}{\sqrt{n}}[/tex].

For a skewed variable, the Central Limit Theorem can also be applied, as long as n is at least 30.

In this problem, we have that:

[tex]\mu = 8, \sigma = 3[/tex]

First day

[tex]n = 5, s = \frac{3}{\sqrt{5}} = 1.34[/tex]

The probability is the pvalue of Z when X = 11. So

[tex]Z = \frac{X - \mu}{\sigma}[/tex]

By the Central Limit Theorem

[tex]Z = \frac{X - \mu}{s}[/tex]

[tex]Z = \frac{11 - 8}{1.34}[/tex]

[tex]Z = 2.24[/tex]

[tex]Z = 2.24[/tex] has a pvalue of 0.9875

On the first day, 98.75% probability that the sample average amount of time taken is at most 11 min.

Second day

[tex]n = 6, s = \frac{3}{\sqrt{5}} = 1.2247[/tex]

The probability is the pvalue of Z when X = 11. So

[tex]Z = \frac{X - \mu}{\sigma}[/tex]

By the Central Limit Theorem

[tex]Z = \frac{X - \mu}{s}[/tex]

[tex]Z = \frac{11 - 8}{1.2247}[/tex]

[tex]Z = 2.45[/tex]

[tex]Z = 2.45[/tex] has a pvalue of 0.9929

On the second day, 99.29% probability that the sample average amount of time taken is at most 11 min.