Assume that the salary of MBAs was normally distributed If t

Assume that the salary of MBAs was normally distributed. If the mean salary of a MBA was $100K with a standard deviation of $10K. What is the probability that a MBA makes less that $70K or more than $130K?

Solution

Normal Distribution
Mean ( u ) =100
Standard Deviation ( sd )=10
Normal Distribution = Z= X- u / sd ~ N(0,1)                  
To find P( X > a or X < b ) = P ( X > a ) + P( X < b)
P(X < 70) = (70-100)/10
= -30/10= -3
= P ( Z <-3) From Standard Normal Table
= 0.0013
P(X > 130) = (130-100)/10
= 30/10 = 3
= P ( Z >3) From Standard Normal Table
= 0.0013
P( X < 70 OR X > 130) = 0.0013+0.0013 = 0.0027