A recent newspaper article reported the results of a study of 364 lawsuits in wh
ID: 3225291 • Letter: A
Question
A recent newspaper article reported the results of a study of 364 lawsuits in which punitive damages were awarded. The article reported that the median damage awarded was $50,000 and the mean damage awarded was $775,000. Create a specific set of data to show how this could be true. Show and explain all steps and calculations involved in the creation of your data set and how you know this meets the criteria of this problem. No more than 100 of your lawsuits can have the same value. Also all amounts must be whole numbers.
Explanation / Answer
If there were 364 lawsuits and the average damage was $775,000, then the total money awarded was:
364*775000 = $282,100,000
An example of this could be if the first 100 lawsuits were each $50000 for a total of $5,000,000 awarded (thus making the median $25000).
You would then subtract this from the original total:
$282,100,000 - $5,000,000 = $277,100,000
To calculate each of the remaining 264 lawsuits, divide the above number by 264.
$277,100,000 / 264 = $1,049,621
Therefore, you would have $25,000 as your median.
((264*1,049,621.21) + (100*25,000) ) / 364 = $768,131
So your answer would be: 100 people received damages of $25,000 and 264 people received damages of $1,049,621