A Certain Brand of Flood Lamps Has a Lifetime That

question 20

Short Answer

A certain brand of flood lamps has a lifetime that is normally distributed with a mean of 3750 hours and a standard deviation of 300 hours.
a. What proportion of these lamps will last for more than 4000 hours?
b. What lifetime should the manufacturer advertise for these lamps in order that only 2% of the lamps will burn out before the advertised lifetime?

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Definitions:

Simple Interest

A way of calculating interest where the interest charge is based on the original principal amount alone.

Compounded Annually

A method of calculating interest where the interest amount is added to the principal sum at the end of each year, affecting the total interest for the next year.

Interest on Interest

The compound interest that is calculated not only on the initial principal but also on the accumulated interest of previous periods.

Time Value

The principle that current money has a higher value than the same amount would in the future, given its potential to earn more.