Answer Happy

Question 4: Suppose an automobile company has the following rules. Cars would be leased for a maximum of 5-years The highest usage allowed during the lease period is 70,000 miles. If the lessee goes beyond this limit, a penalty of 25 cents per mile is added to the lease cost. -The distribution of miles driven on 5-year leases follows the normal distribution. The mean is 57,000 miles and the standard deviation is 5,000 miles. Answer the following: a. What percent of the leases will yield a penalty because of excess mileage? [2 marks] b. If the automobile company wanted to change the terms of the lease so that 20% of the leases went over the limit, where should the new upper limit be set? [2 marks] c. One definition of a low mileage car is one that is 5-years old and has been driven less than 48,000 miles. What percentage of the cars returned are considered low mileage? [2 marks]