Question

Credit card applicants have a mean credit rating score of 667. Assuming that the distribution of credit rating scores, X, is Normal with standard deviation 65, calculate the probability that a single applicant for a credit card will have a credit rating score above 700.

Answer 1

Step-by-step explanation:

The probability that a single credit card applicant will have a credit rating score above 700 can be calculated using the Z-score formula:

Z = (X - Mean) / Standard Deviation

Where X is the credit rating score of 700, the Mean is the mean credit rating score of 667, and Standard Deviation is 65.

Plugging in the values:

Z = (700 - 667) / 65

Z = 0.4615

Now that we have the Z-score, we can use a standard normal table to find the corresponding probability. The probability of having a Z-score of 0.4615 or higher is 0.6429, which means that there is a 64.29% chance that a single applicant for a credit card will have a credit rating score above 700.