Assume the cost of an extended 100,000 mile warranty for a particular SUV follow

Question

Assume the cost of an extended 100,000 mile warranty for a particular SUV follows the normal distribution with a mean of $1, 570 and a standard deviation of $65. Complete parts (a) through (d) below. a) Determine the interval of warranty costs from various companies that are one standard deviation around the mean The interval of warranty costs that are one standard deviation around the mean ranges from $ to $ (Type integers or decimals. Use ascending order.) b) Determine the interval of warranty costs from various companies that are two standard deviations around the mean The interval of warranty costs that are two standard deviations around the mean ranges from $ to $ (Type integers or decimals. Use ascending order) c) Determine the interval of warranty costs from various companies that are three standard deviations around the mean The interval of warranty costs that are three standard deviations around the mean ranges from $ to $ (Type integers or decimals Use ascending order) d) An extended 100,000 mile warranty for this type of vehicle is advertised at $1, 830 Based on the previous results what conclusions can you make? A. The $1, 830 cost of this warranty is much higher than average due to the fact that it is more than tree standard deviations above the mean B. This warranty is better quality than warranties offered by competing companies due to the fact that t is more than three standard deviations above the mean C. The $1, 800 cost of this warranty must be an error in the advertisement because a data value cannot be more tan nee standard deviations from the mean D. The $1 830 cost of this warranty slightly higher than average due the fact that is more than three standard deviations above the mean

Explanation / Answer

a) The interval of warranty costs that are one standard deviation around the mean ranges from (1570-65)=1505 to (1570+65)=1635

b) The interval of warranty costs that are two standard deviation around the mean ranges from (1570-2*65)=1440 to (1570+2*65)=1700

c) The interval of warranty costs that are three standard deviation around the mean ranges from (1570-3*65)=1375 to (1570+3*65)=1765

d) D) The $1,830 cost of this warrantly is slightly higher than average due to the fact that it is more than three standard deviations above the mean.

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