An insurance company receives 2090 claims in a year each...

An insurance company receives 2090 claims in a year. Each claim is normally distributed with mean 5000 and standard deviation 500. Find the 95th percentile for the total of the 2090 claims. A) 2,750,300 B) 4,337,000 C) 6,738,500 D) 7,345,700 E) 10,487,600

Transcript

00:01 Hello students we are given here insurance company received claims and these are the amount of claims a year and these are normally distributed.

00:10 So mean value and standard deviation is given we need to find 95th percentile.

00:16 So basically normal distribution is dominating here.

00:22 Normal distribution if i write here normal distribution is dominating here.

00:31 So if i write here in normal distribution, all the random variables are distributed amongst bell shaped curve.

00:41 Something like this.

00:42 If i write here, all the random variables are distributed amongst bell shaped curve and this is our probability value.

00:50 So here, random variables having probability and sum of probability values equals to 1.

00:56 So it means total area under normal curve is always equal to 1.

01:01 It means that half of the area is 0 .5 and this is 0 .5.

01:06 It means that area is symmetric about y -x is right.

01:11 So basically, if i write there, we have here, z score, which is x minus mu divided by sigma, where mu is mean and sigma is standard deviation, standard deviation.

01:26 But if number of samples, n is equal to number of samples, are given number of samples are given so we need to find our new standard deviation which is sigma divided by unroute of n so let us first is decide our z score value so we all know x value is given as so we need to find 95th percentile so it means we need our x value and this is sigma which is 500 divided by 2090 so this is basically 2090 so this is basically so z score value is calculated around this x minus 5 ,000 divided by...

Question

An insurance company receives 2090 claims in a year. Each claim is normally distributed with mean 5000 and standard deviation 500. Find the 95th percentile for the total of the 2090 claims. A) 2,750,300 B) 4,337,000 C) 6,738,500 D) 7,345,700 E) 10,487,600

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