A major cell phone service provider has determined that the number of minutes per month that its customers use their phone is normally distributed with mean equal to 445.5 minutes and standard deviation equal to 22.75 minutes. The company is thinking of charging a lower rate for customers who use the phone the most. If it wishes to give the rate reduction to no more than 9 percent of its customers, what should the cut-off be?
Accepted Solution
A:
Answer: we can say that the cut-off= 476.125 minutesStep-by-step explanation:mean = 445.5 minutesstandard deviation = 22.75 minutesrate reduction not more than = 9%The z score corresponding to (100-9)%= 0.91 is 1.35by standard normal Tablewe use [tex]z=\frac{x-\mu}{\sigma}[/tex][tex]1.35=\frac{x-445.5}{22.75}[/tex]on calculating we get x= 476.2125 minutesTherefore, we can say that the cut-off= 476.125 minutes