Question

To illustrate the importance of outliers, suppose you do not count the owner in the last problem. The data for the other workers is:

5 people earn $25,000, 3 earn $27,000, and 1 earns $34,000

What is the mean salary and standard deviation (to the nearest dollar) of the workers?

Answer 1

The mean of these workers is total salary/number of workers=(5*25000+3*27000+1*34000)/(5+3+1)=26667, approximately. The standard deviation formula is \sqrt(1/n*sum of (x_i-mu)^2) from 1 to n. Plug in n=9, mu=26667, the standard deviation is 2915 dollars approximately.