PROBABILITIES AND NORMAL DISTRIBUTION

Normal Distribution

 is a continuous probability distribution that describes data that clusters around a mean. The graph of the
associated probability density function is bell-shaped, with a peak at the mean, and is known as the bell curve.

Properties of a Normal Distribution

 The distribution is bell-shaped.

 The mean, median and mode are equal and are located at the center of the distribution.
 The normal distribution is unimodal.
 The normal distribution curve is symmetric about the mean.
 The normal distribution is continuous.
 The normal curve is asymptotic (it never touches the x-axis)
 The total area under the normal distribution curve is 1.00 or 100%.
 The area under the part of a normal curve that lies within 1 standard deviation of the mean 68%; within 2
standard deviations, about 95%; and with 3 standard deviations, about 99.7%.

Standard Normal Distribution

A normal distribution can be converted into a standard normal distribution by obtaining the z-value.

A z-value is the signed distance between a selected value, designated x, and the mean, µ, divided by the
standard deviation. It is also called as z scores, the z statistics, the standard normal deviates, or the standard normal
values.

x−μ
Standard Normal Value: z=
σ
where: z = z value
x = the value of any particular observation or measurement
μ = the mean of the distribution
σ = standard deviation of the distribution
Table A: Standardized Normal Distribution
Example 1: Determine the area under the standard normal distribution curve between z=0 and z=1.85.
 Solution

Draw the figure and represent the area as shown in the figure below.

Since Table A gives the area between 0 and any z-value to the right of 0, we only need to look up the z value in
the table. Find 1.8 in the left column and 0.05 in the top row. The value where the column and row meet in the table is
the answer, 0.4678.

Table A: Standardized Normal Distribution

Hence, the area is 0.4678 or 46.78%.

Example 2: Determine the area under the standard normal distribution curve between z=0 and z=-1.15.

Solution:

The desired area is shown below.

The area between z=0 and z=-1.15 or P(-1.15<z<0) is 0.3749. Therefore, the area is 0.3749 or 37.49%.
Example 3: Find the area under the standard normal distribution curve to the right of z=1.15.

Solution:

Draw the figure and represent the area as shown in the figure.

The required area is the right tail of the normal curve. First, find the area between z=0 and z= 1.15.

P(0<z<1.15) = 0.3749

Then subtract P(0<z<1.15) = 0.3749 from 0.5000, since half of the area under the curve is to the right of z=0.

P(z>1.15) = 0.5000 - P(0<z<1.15)

= 0.5000 – 0.3749

= 0.1251

The area to the right of z=1.15 is 0.1251 or 12.51%.

Example 4: Determine the area under the standard normal distribution curve between z=0.75 and z=1.85.

Solution:

Draw the figure and represent the area as shown in the next figure.

P(0<z<1.85) = 0.4678 P(0<z<0.75) = 0.2734

P(0.75<z<1.85) = P(0<z<1.85) - P(0<z<0.75)

= 0.4678 – 0.2734

= 0.1944

Example 5: Find the area under the standard normal distribution curve between z=1.15 and z=-1.85.

Solution:

Draw the figure and represent the area shown in the figure.

P(-1.85<z<0) = 0.4678 P(0<z<1.15) = 0.3749

P(-1.85<z<1.15) = P(-1.85<z<0) + P(0<z<1.15)

= 0.4678 + 0.3749

= 0.8427

Hence, the total area is 0.8427 or 84.27%.

Example 6: Find the z value such that the area under the standard normal distribution curve is between 0 and z value is
0.3962.

Solution:

Draw the figure. The area is shown in the figure below.

Next, find the area in Table A, as shown in the figure. Then correct z value in the left column as 1.2 and in the top
row as 0.06, and add these two values to get 1.26.

Hence, the z value is 1.26.

Application of Normal Distribution

 Now that we have discussed to use the Standardized Normal Distribution in conjunction with the standard
normal value formula, many different types of probability problems involving normal distribution can be resolved. To
illustrate this, we will deal with some examples.

x−μ
z=
σ
where: z = z value
x = the value of any particular observation or measurement
μ = the mean of the distribution
σ = standard deviation of the distribution
The formula is used to gain information about an individual data value when the variable is normally distributed.

Example 1: The average Pagibig salary loan for RFS Pharmacy Inc. employees is P23,000. If the debt is normally
distributed with a standard deviation of P2,500, find the probability that the employee owes less than P18,500.

Solution:

Step 1: Draw a figure and represent the area.

Step 2: Find the z value for P18,500.

x−μ 18,500−23,000 4,500

z= = = =−1.80
σ 2,500 2,500
Step 3: Find the appropriate area. The area obtained in the Standardized Normal Distribution Table is 0.4641, which
corresponds to the area between z=0 and z=-1.80.

P(-1.80<z<0) = 0.4641

Step 4: Subtract 0.4641 from 0.5000.

P(x<18,500) = P(z<-1.80) = 0.5000 - P(-1.80<z<0)

= 0.5000 – 0.4641

= 0.0359
Hence, the probability that the employee owes less than P18,500 in Pagibig salary loan is 0.0359 or 3.59%.

Example 2: The average age of bank managers is 40 years. Assume the variable is normally distributed. If the standard
deviation is 5 years, find the probability that the age of a random selected bank manager will be in the range between
36 and 46 years old.

Solution:

Assume that ages of bank managers are normally distributed; then cut off points are as shown in the figure
below.

Step 1: Draw a figure and represent the area.

Step 2: Find the two z values

x−μ 35−40 −5
x = 35 z= = = =−1.00
σ 5 5
x−μ 46−40 6
x = 46 z= = = =1.20
σ 5 5

Step 3: Find the appropriate area for z = -1.00 and z = 1.20.

 P(-1.00<z<0) = 0.3413 P(0<z<1.20) = 0.3849

Step 4: Add P(-1.00<z<0) and P(0<z<1.20).

P(35<x<46) = P(-1.00<z<1.20) = P(-1.00<z<0) + P(0<z<1.20)

= 0.3413 + 0.3849

= 0.7262

Hence, the probability that a randomly selected bank manager is between 35 and 46 years old is 0.7262 or 72.62%.