Question

a small business has an average income of 3000 per month with a standard deviation of 250. if the income in a given month is 3300 what z score corresponds to this value

Answer 1

The correct answer is z = 1.2

Explanation:

μ or average income = US$ 3,000

σ or standard deviation = US$ 250

Income in a given month = US$ 3,300

For calculating the z score, we use the following formula:

z = (x – μ) / σ

z = (3,300 – 3,000 / 250)

z = 300/250

z = 6/5 = 1.2

Interpreting z

A Z score tells us how many units of standard deviation (1.2 in this case)from the average a given score is, that is, we do not count in quantity of points, but in quantities of standard deviations. To use the Z score we require the distribution to be normal and to know the average and standard deviation of the scores.