Question

According to the Air Transport Association of America, the average operating cost of an MD-80 jet airliner is $2,087 per hour. Suppose the operating costs of an MD-80 jet airliner are normally distributed with a standard deviation of $164 per hour. (Round the value of z to 2 decimal places. Round your answers to 2 decimal places.)

(a) At what operating cost would only 23% of the operating costs be less?

Answer 1

Given that,

P(Z < -0.74) = 0.23

To see the probability 0.23 in the standard normal table the cumulative z value is -0.74

z = -0.74

Using z-score formula,

x = z * +

x = -0.74 * 164 + 2087 = 1965.64

Operating cost = $1965.64