Normal Distribution Problems: Z‑Scores, Percentages & Parameters
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Problem 4: Bank Savings Distribution
The average savings in the clients' accounts of a certain bank follow a normal distribution N(50,000, 15,000) (mean = 50,000 €, standard deviation = 15,000 €). The bank distributes its clients into three categories:
- Category A: Those clients that have less than 20,000 € in their savings account
- Category B: Those clients that have between 20,000 € and 80,000 € in their savings account
- Category C: Those clients that have more than 80,000 € in their savings account
Calculate:
4a) What percentage of clients belong to Category A?
Use the standard normal variable Z = (X - μ) / σ.
For X = 20,000 €:
Z = (20,000 - 50,000) / 15,000 = -30,000 / 15,000 = -2.000
The cumulative probability Φ(-2.00) ≈ 0.0228,... Continue reading "Normal Distribution Problems: Z‑Scores, Percentages & Parameters" »