Shaver Manufacturing, Inc., offers dental insurance to itsemployees. A recent st

Question

Shaver Manufacturing, Inc., offers dental insurance to itsemployees. A recent study by the human resource director shows theannual cost per employee per year followed the normal probabilitydistribution, with a mean of $1,280 and a standard deviation of$420 per year.

1. What fraction of the employees cost more than $1,500 per yearfor dental expenses?
2. What fraction of the employees cost between $1,500 and $2,000per year?
3. Estimate the percent that did not have any dental expense.
4. What was the cost for the 10 percent of employees who incurredthe highest dental expense?

Shaver Manufacturing, Inc., offers dental insurance to itsemployees. A recent study by the human resource director shows theannual cost per employee per year followed the normal probabilitydistribution, with a mean of $1,280 and a standard deviation of$420 per year.

1. What fraction of the employees cost more than $1,500 per yearfor dental expenses?
2. What fraction of the employees cost between $1,500 and $2,000per year?
3. Estimate the percent that did not have any dental expense.
4. What was the cost for the 10 percent of employees who incurredthe highest dental expense?

Explanation / Answer

a. What fraction of the employees cost more than $1,500 peryear for dental expenses? --- a(1500) = (1500-1280)/420 = 220/420 = 0.5238 P(x > 1500) = P(z > 0.5238) = 0.30 = 30% =============================================== b. What fraction of the employees cost between $1,500 and $2,000per year? z(2000) = (2000-1280)/420 = 1.7143... P(1500

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