Question

Suppose that prices of recently sold homes in one neighborhood have a mean of $215,000 with a standard deviation of $8900. Using Chebyshev's Theorem, what is the minimum percentage of recently sold homes with prices between $197,200 and $232,800

Answer 1

The minimum percentage of recently sold homes with prices between $197,200 and $232,800 is 75%.

Explanation:

Chebyshev Theorem

The Chebyshev Theorem can also be applied to non-normal distribution. It states that:

At least 75% of the measures are within 2 standard deviations of the mean.

At least 89% of the measures are within 3 standard deviations of the mean.

An in general terms, the percentage of measures within k standard deviations of the mean is given by
`100(1 - (1)/(k^(2)))`.

In this question:

Mean of $215,000, standard deviation of $8900.

What is the minimum percentage of recently sold homes with prices between $197,200 and $232,800?

215000 - 2*8900 = 197200

215000 + 2*8900 = 232800

Within 2 standard deviations of the mean, so:

The minimum percentage of recently sold homes with prices between $197,200 and $232,800 is 75%.