The amount of money requested on home loan applications at a Bank follow a normal distribution with a mean of Tk. 73 lacs and a standard deviation of Tk.22 lacs. A loan application is received this morning. What is the probability that- i. The amount requested is Tk.75 lacs or more? ii. The amount requested is Tk. 45 lacs or less? iii. The amount requested is between Tk. 55 lacs and Tk.90 lacs?
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
The amount of money requested on home loan applications at a Bank follow a
i. The amount requested is Tk.75 lacs or more?
ii. The amount requested is Tk. 45 lacs or less?
iii. The amount requested is between Tk. 55 lacs and Tk.90 lacs?
Step by step
Solved in 4 steps with 3 images
