Muhammad Idrees Shinwary

ID #41240

Assignment 6

1. The true proportion of accounts receivable with some kind of error is 8 percent
for Moby Group. If an auditor randomly samples 100 accounts receivable,

 a) is it acceptable to use the normal approximation to estimate the

probability that fewer than two will contain errors? Explain your reasoning.
It is not acceptable to use the normal approximation because the given data
follows Poisson Distribution.
 b) what is the mean and standard deviation of errors?
Mean = n*p = 100*0.08 = 8
Standard Deviation = (n*p)^1/2 = (8)^1/2 = 2.828
 c) assume the auditor takes a sample of 150, what is the probability that less
than 5 will contain errors?
Y(x3<) > Y(x>9) + Y (x > 7) + Y (x>6) + Y (x > 4) + Y (x > 8)

 = 150*0.08 = 12
0.00760, P(x<5) = 0.00760

2. The weights of sheep available for sale for during Eid Qurban is normally
distributed with a mean weight of 45kgs and standard deviation of 5kgs.

 what is the probability that you buy a sheep and its weight is more than
50kgs?
Probability = 1-NORM.DIST (50, 45, 5, TRUE) = 0.1587
 If you want the weight of your sheep to be in the 80th percentile, what should
be the weight of the sheep that you should buy?
The weight of the sheep = NORM.INV (0.8,45,5) = 49.2081 Kg

3. A car service shop services a vehicle with an average of 15 minutes and standard
deviation of 2 minutes. Assuming the length of time is normally distributed,

 a) what is the probability that you will get your car serviced in more than 18
minutes?

To find P( car serviced in more than 18 minutes )

that is to find P(X > 18)
P(X > 18) = 1 - P(X ≤ 18)

Using Excel Function "NORM.DIST", we get

P(X > 18) = 1 - NORM.DIST(18, 15, 2, TRUE)

P(X > 18) = 0.0668

P(car serviced in more than 18 minutes) = 0.0668

  b) what is the probability that you will get your car serviced in less than 14
minutes?

To find P( car serviced in less than 14 minutes)

that is to find P(X < 14)

Using Excel Function "NORM.DIST", we get

P(X < 14) = NORM.DIST(14, 15, 2, TRUE)

P(X < 14) = 0.3085

P(car serviced in less than 14 minutes) = 0.3085

 c) how long it will take for the middle 70% of customers to get their car
serviced?

Let X1 and X2 be such that middle 70 percent lie within these 2 times

Thus P(X1 < X < X2) = 0.70

Since these are middle 70%, they are symmetrical, thus

P(X < X2) = 0.5 + 0.7/2 = 0.85

Using Excel function NORM.INV, we find the value of X2

X2 = NORM.INV (0.85, 15, 2)

X2 = 17.07

Again, since they are middle 70%

X1 = 15 - (X2 - 15)

     = 15 - (17.07 - 15)

X1 = 12.93

Middle 70% customers will take 12.93 minutes to 17.07 minutes to

service their cars

4. The time required to complete a marathon run is normally distributed with a

mean of 360 minutes and a standard deviation of 15 minutes.

 a) what is the maximum number of minutes that the fastest 15% of runners
will take to finish the race?
 k−360
= 1.0364
P ( z <15 )
Hence, K= 1.0364*15+360 = 375.546
 b) what is the least number of minutes that the slowest 15% will take to
finish the race?
−k −360
= -1.0364
P ( z <15 )
Hence, K = -1.0364*15+360 = 344.454

5. The standard deviation of a normal random variable X is $50. Given that P (X ≤

$40) = .25, what is the mean of the distribution is equal to?

= 40 + 0.67 (50)

= 40 + 33.5
= 73.5

Mean = 73.5

6. City Medical is concerned about rising lab test costs and would like to know what
proportion of the negative lab tests for COVID19 are actually proven correct
through subsequent blood test. City Medical demands a sample large enough to
ensure an error of ±0.5% with 95% confidence. What should be the sample size?

At 95% confidence interval, the z value = 1.96.

Now sample size N is calculated as:

z 2∗p∗( 1−P )
N=
E2
Now considering p (population proportion) = 0.5 (considering the unlimited
population size) we get:

1.962∗0.5∗(⊢ 0.5 )
N=
0.52
= 384 (considering the nearest integer)

7. Kam Air is considering launching flights to Frankfurt and wants to estimate the
average number passengers it may have in a month with 99% confidence and a
margin of error of ±5 passengers. What is the required sample size, assuming the
number of passengers travelling to Frankfurt are normally distributed, with a range
of 0 to 450?
 Max−Mⅈn
Standard deviation = = 450/4 = 112.5
4
Critical value= 2.58

2.58∗112.5 2
N¿
5̈2
= 3369.8

8. AUAF surveyed 500 students and found that 150 of the students surveyed watch
more than 5 hours of Netflix monthly. Develop a 90 percent confidence interval to
estimate the true proportion of students who watch more than 5 hours of television
each week. What is the confidence interval?
P= 150/500 = 0.3
N = 500
Standard error = √ P ( + p ) ∕ n= √ 0.3∗0.7 ∕ 500=0.02
For 90% confidence interval multiplicative constant is 1.64.
So, 90% confidence interval
= [0.3-1.64*0.02, 0.3+1.64*0.02]
= [0.267, 0.333]

9. Average annual expense of a middle-income household living in Afghanistan is

360,000 Afghani with a standard deviation of 4,000 based on sample of 1,500
respondents. What is the range for annual expense for 93% of middle-income
households in Afghanistan?
Range = 360000 +- 187.13
Range = (359813, 360187)