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Math Help - [SOLVED] Uniform Distribution Question

  1. #1
    arsenicx101
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    [SOLVED] Uniform Distribution Question

    Any help on this problem would be greatly appreciated.

    "When I write checks I record the amount rounded off to the nearest dollar. Assume for simplicity that X = the roundoff error from a single transaction (in cents) has the continuous distribution X ~ Uniform(-50,50). After 100 independent trials, what is the probability that my financial records differ from my account balance by more than $7 (i.e. 700 cents)."

    This problem is located under the heading "Central Limit Thm, Normal approximation to binomial"

    Thanks in advance.
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  2. #2
    Grand Panjandrum
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    Quote Originally Posted by arsenicx101 View Post
    Any help on this problem would be greatly appreciated.

    "When I write checks I record the amount rounded off to the nearest dollar. Assume for simplicity that X = the roundoff error from a single transaction (in cents) has the continuous distribution X ~ Uniform(-50,50). After 100 independent trials, what is the probability that my financial records differ from my account balance by more than $7 (i.e. 700 cents)."

    This problem is located under the heading "Central Limit Thm, Normal approximation to binomial"

    Thanks in advance.
    After n transactions the round off error is approximatly normal with SD equal
    to sqrt(n)*s, where s is the standard deviation of the round off on a single
    transaction, which in this case is 100/sqrt(12).

    The above should allow you to answer this question.

    RonL
    Last edited by CaptainBlack; November 10th 2007 at 09:48 AM.
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