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Credit card holders carry an average debt of $3,027 per month, with a standard deviation of...

Credit card holders carry an average debt of $3,027 per month, with a standard deviation of $1,060. A credit card company is looking to drop its accounts with their customers who are not using their cards as much, that is customers whose monthly debts are in the bottom 2.5% of all accounts. Use a calculator to find how much debt must a customer have to be dropped by the credit card company if the company only looks at 30 accounts.
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Answer #1

We assume that the monthly debts follow normal distribution with mean  $3,027 per month and standard deviation of $1,060.

Z value for 2.5% percentile is -1.96

The monthly debt below which credit card company will drop the accounts is

3027 - 1.96 * 1060

= $949.4

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