The Webster National Bank is reviewing its service charge and interest-paying
policies on checking accounts. The bank has found that the average daily balance on
personal checking accounts is $550, with a standard deviation of
$150. In addition,
the average daily balances have been found to be normally distributed (Gaussian).
(a) What percentage of personal checking account customers carry average daily
balances in excess of $800?
(b) What percentage of the banks customers carries average daily balances below
(c) What percentage of the banks customers carries average daily balances
between $300 and $700?
(d) The bank is considering paying interest to customers carrying average daily
balances in excess of a certain amount. If the bank does not want to pay
interest to more than 5% of its customers, what is the minimum average daily
balance it should be willing to pay interest on?
Step by step method for computing probability calculation using Z score is given in the answer.