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Down River Federal Savings: Home Loan Applications

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The amounts of money requested on home loan applications at Down River Federal Savings follow the normal distribution, with a mean of $70,000 and a standard deviation of 20,000. A loan application is received this morning. What is the probability:

a.) The amount requested is $80,000 or more?
b.) The amount requested is between $65,000 and $80,000?
c.) The amount requested is $65,000 or more?

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Solution Summary

This solutions discussion finds a loan amount requested according to a mean and a standard deviation.

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a.) The amount requested is $80,000 or more?
This is a z-test question.
Mean is M = 70000
Standard deviation is SD = 20000
Then compute z = (80000-M)/SD = (80000-70000)/20000 = 0.5
From a z-table*, we ...

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