Norm Dickins the town pharmacist is interested in obtaining a loan to expand his business. He will get a better interest rate if he can reasonably demonstrate that his near-term monthly revenues will be between $10,000 and $15,000. He doesn’t know the exact level of sales to expect over the next several months, but based on past experience, he knows it should be around $13,000. He also knows that his sales vary by about $2,500 from month to month.
What is the probabilitythat his store will generate the revenue required for him to obtain a favorable loan rate?
We obtain the mean and standard deviation from the statement of the problem
M = 13000 =mean
s= 2500 …
Calculates probability using Normal Distribution