About 99% observation of a company’s daily sales were within the interval of $230,000 - $480,000. Daily sales were normally distributed. What’s the standard deviation of the company?
Mean = ($230,000 + $480,000) / 2 = $355,000 99% of observations under the normal distribution are within ±2.58 standard deviations. Therefore, $355,000 + 2.58(x) = $480,000. X = $48,449.61 Hope that was clear enough.
never came across this type before. Thanks for posting.
Answer is $41,667. I don’t understand how it’s calculated.
Mean = 355,000 480,000 - 350000 = 125,000 125,000/3 = 41667 It looks like they did just an estimation of 3 std deviations, rather than using 2.58 as the divisor.
king_kong Wrote: ------------------------------------------------------- > Mean = ($230,000 + $480,000) / 2 = $355,000 > > 99% of observations under the normal distribution > are within ±2.58 standard deviations. > > Therefore, $355,000 + 2.58(x) = $480,000. > > X = $48,449.61 > > Hope that was clear enough. you don’t have to calculate mean. x=(480,000-230,000)/(2*2.58)
I see. Still think dividing by 2.58 is more precise… Thx all.
P(mean-3*sd