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MPORTANT: Before working on this homework, make sure you have read the homework instructions under t content area of "Assignments (Practices &HWs)". An illegible file will automatically lead to a score of zero. Chapter 7 Point Estimation of Parameters and Sampling Distributions: 7-13 Question not in the textbook] An insurance company has 25,000 automobile policy holders. If the yearly claim of a policy holder is a random variable with mean 320 and standard deviation 540, use CLT to approximate the probability that the total yearly claim exceeds 8.3 million. Chapter 8 Statistical Intervals for a Single Sample. 8-10 F3

Explanation / Answer

Ans:

Use CLT:

mean=25000*320=8000000

standard deviation=sqrt(25000)*540=85381.5

z=(8300000-8000000)/85381.5

z=3.51

P(z>3.51)=0.0002

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