If we model aftertax household income with a normal distribu

If we model after-tax household income with a normal distribution, then the figures of a study imply the information in the following table. Assume that the distribution of incomes in each country is normal. What percentage of U.S. households had an income of $55,000 or more? (Round your answer to the nearest percent.)

Solution

As per the empirical rule for a normal distribution, the following percentages of data fall within a certain number of standard deviations from the mean:
• 68% of the data falls within one standard deviation of the mean.
• 95% of the data falls within two standard deviations of the mean.
• 99.7% of the date falls within three standard deviations of the mean.

Since $55000 falls within 2 standard deviations from the mean, therefore, 95 % of the U.S. household had income of $55000 or more.