Question

A family moved to Orlando, FL and bought a home. They paid $350,000 for their house. In their neighborhood the mean price of a home is $375,000 with a standard deviation of $7,500. Calculate the z-score for the price of their home and indicate if the price they paid for their home usual or unusual.

Answer 1

To calculate the z-score, we can use the formula:

z = (x - μ) / σ

where x is the value we want to calculate the z-score for, μ is the mean, and σ is the standard deviation.

In this case, the value x is $350,000, the mean μ is $375,000, and the standard deviation σ is $7,500.

Plugging in the values:

z = ($350,000 - $375,000) / $7,500

z = -0.03333

Since the z-score is close to zero, it indicates that the price they paid for their home is close to the mean. Therefore, it would be considered usual or typical.

- Ai generated btw