At a particular restaurant the amount of time between asking

At a particular restaurant, the amount of time between asking for the bill and being given it has mean 5 minutes and standard deviation 3 minutes. The tips at this restaurant are disributed with mean 20% and standard deviation 7%. The correlation between time for the bill and tip is r = 0.43. Use this information to predict what the tip will be on average, given that there are 9 minutes between asking for and receiving the bill.

A. 13%
B. 14%
C. 15%
D. 16%
E. 17%
F. 18%

Solution

The correct answer is 16%.

Tips = Average Tips + Correlation * Waiting time

      = 20 + (-0.43)*9

     = 16.13

Hence, D option is 16% is the correct answer.