Question

Suppose Blue Cab Company charges $2.85 a ride up to 0.1 miles and $0.30 for each additional tenth of a mile. If the mean distance a passenger wants to go is 5.3 miles with a standard deviation of 1.4 miles, what is the standard deviation of the fare passengers pay

Answer 1

$4.20

Explanation:

Calculation for the standard deviation of the fare passengers pay of Blue Cab Company:

T = Total amount of the cab fare

Formula for Standard deviation of T will be:

T = σa+bX= bσX.

To convert the rate to dollars per mile from dollars per tenth of a mile, it will be:

b= 3

Hence,

Standard deviation of T is :

3.00(1.4) = $4.20.