The First Chicago Bank is reviewing its service charges and interest-paying policies on checking accounts. The daily balance of a checking account is defined to be the balance in the checking account at 2:00pm. The bank has found that for all personal checking accounts the mean of all the daily balances is $800 and the standard deviation is $150.
In addition, the distribution of personal checking account daily balances can be approximated very well with a normal model.
Question 1) What percentage of the bank's customers carry daily balances between $700 and $1,000?
Question 2)The bank is considering paying interest to customers carrying daily checking account balances in excess of a certain amount. If the bank does not want to pay interest to more than 6% of its checking account customers, what is the minimum daily balance on which it should be willing to pay interest?

The percentage of the bank's customers carry daily balances between $700 and $1,000 is 65.7%.

The minimum daily balance on which it should be willing to pay interest is $1,198.

Step-by-step explanation:

We have a normal distribution with mean = $800 and standard deviation = $150.

a) We can calculate this value with the standard normal distribution, calculating the z-value for $700 and $1,000.

The percentage of the bank's customers carry daily balances between $700 and $1,000 is 65.7%.

b) We must calculate from what amount only 6% of the accounts remain.

This is done by solving:

This happens for a z-value of z=2.652.

This corresponds to a amount of $1,198.

The minimum daily balance on which it should be willing to pay interest is $1,198.

step-by-step explanation:

if you want to solve percent error follow these steps.

1. subtract the accepted value from the experimental value.

2. take the absolute value of step 1.

3. divide that answer by the accepted value.

4. multiply that answer by 100 and add the % symbol to express the answer as a percentage.

if you want to solve percent of change just do this.

1. work out the difference (increase) between the two numbers you are comparing.

2. divide the increase by the original number and multiply the answer by 100. if your answer is a negative number then this is a percentage decrease.

hope this : )