In: Statistics and Probability
Suppose that the middle 68% of monthly food expenditures for a family of four fall between 533.21 and 685.13. Give an approximate estimate of the standard deviation of the expenditures. Assume the expenditures have a normal distribution
Using empirical rule (68 - 95 - 99.7)
Approximately 68% data falls in 1 standard deviation of the mean.
That is 68% data falls between - and +
Comparing this interval with (533.21 , 685.13) we get,
- = 533.21 and + = 685.13
Solve these two equations for by subtracting.
+ = 685.13
- ( - = 533.21)
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2 = 685.13 - 533.21
= 75.96
Approximate estimate of standard deviation = 75.96