Question

Suppose there is a city where the mean cost per month of a one-bedroom apartment is $1,500, with a standard deviation of $250. Approximately what percentage of one-bedroom apartments in the city cost between $750 and $1,000?

Answer 1

2.35%

Explanation:

Firstly, we calculate the z-score of each

we have this as;

z-score = (x - mean)/SD

from the question, mean is $1,500 while standard deviation is $250

So for each;

z-score = (750-1500)/250 = -750/250 = -3

z-score = (1000-1500)/250 = -500/250 = -2

Simply put, we want to calculate the percentage of prices between three standard deviations below the mean and two standard deviations below the mean

We can calculate this by using the empirical rule chart;

By looking up the this, the percentage of values between 3 SD below the mean and 2 SD below the mean is 2.35%