Question

The average one-bedroom apartment rents for $2,000 a month in Washington, D.C., with a standard deviation of $400. A real estate agent is looking to find a one-bedroom apartment for a client that is in the top 15% of all rentals in the city. How much should a client expect to pay for a one-bedroom apartment in the top 15% of rentals if the agent only surveys 50 apartments in the city

Answers

  1. The amount expected to pay for a one-bedroom apartment is $2,059
    Given,
    Rent of apartment in Washington DC for a month = $2000
    Standard deviation = $400
    The calculation of the amount expected to pay is shown below:-
    Z value for top 15% area = 1.04
    Then,  
    Find the corresponding value to 1 – 0.15
    = 0.85
    Therefore,
    X = μ + Z σ/√n
       = 2000 + 1.04 × (400/√50)
       = 2000 + 1.04 × 56.56854249
    X = 2058.831284 ≈ 2059
    The amount expected to pay for a one-bedroom apartment is $2,059
    Learn more about standard deviation here: https://brainly.com/question/16941569
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