Show work with short explanation A recent study indicates th

Show work with short explanation:

A recent study indicates that the annual cost of maintaining and repairing a car in a town in Ontario averages 200 with a variance of 260. If a tax of 20% is introduced on all items associated with the maintenance and repair of cars (i.e., everything is made 20% more expensive), what will be the variance of the annual cost of maintaining and repairing a car?

Solution

V( New) = V(1.2 * V(Old) ) = 1.2^2 V(Old) = 1.44*260 = 374.4