Using the information below, answer the following questions. Be sure to show all

Question

Using the information below, answer the following questions. Be sure to show all your work. The Webster National Bank (WNB), a small Midwestern bank is reviewing its service charges and interest- paying policies on checking accounts. The bank presently has a total of 5,000 checking accounts. The bank has found that the average daily balance on all of its personal checking accounts is $550 with a standard deviation of $150. In addition, the average daily balances have been found to be normally distributed Listed below you will find current balance information on just 20 randomly sampled accounts maintained at WNB Account Acct Balance Account Acct Baa Account Asct Balance Account Asst Balance 539 575 700 714 546 S523 S569 S565 S531 $402 16 17 $545 18 S559 19 $461 20 S560 $800 13 14 15 $386 $810 $550 $290 10

Explanation / Answer

10.

Probability of a customer carrying an average daily balance below $751

= 1 - P($7501-$850) - P($851-$950) - P($951 or more)

= 1 - 0.069 - 0.019 - 0.0038

= 1 - 0.0918

= 0.9082

8.

Out of 20, 17 are in range $200 to $700 (714,810,800 are out of range)

Thus, required percentage = 17/20*100 = 85%

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.