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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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    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 ...

    Solution Summary

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