3.3 In an article about the cost of health care, Money magazine reported that a

Question

3.3 In an article about the cost of health care, Money magazine reported that a visit to a hospital emergency room for something as simple as a sore throat has a mean cost of NS328 (Money, January 2009). Assume that the cost for this type of hospital emergency room visit is normally distributed with a standard deviation of N$92. Answer the following questions about the cost of a hospital emergency room visit for this medical service. 3.3.1 What is the probability that the cost will be between NS300 and NS4007 3.3.2 If the cost to a patient is in the 14) lower 8% of charges for this medical serice, what was the cost of this patient's emergency room visit?

Explanation / Answer

3.3)

Mean = $328
Stdev = $92

3.3.1) P(300<X<400) = P(300-328 / 92 <Z< 400-328/92) = P(.38<Z<.78) = .7831-.3804 = .4026

3.3.2) If the cost of the patient is in lower 8% then the cost would be ?

P(Z<=z) = .08
The z value for P(Z<=z) is -1.404
So, Value in the lower 8% can range from 0 to -1.405*90+328 = $201.55

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