A woman sued a computer keyboard manufacturer, charging that her repetitive stress injuries were caused by the keyboard. The injury awarded about $3.5 million for pain and suffering, but the court then set aside that award as being unreasonable compensation. In making this determination, the court identified a "normative" group of 27 similar cases and specified a reasonable award as one within two standard deviations of the mean of the awards in the 27 cases. The 27 awards were (in $1000s) 36, 62, 73, 114, 139, 140, 148, 154, 238, 290, 340, 410, 600, 750, 750, 750,1050, 1100, 1135, 1150, 1200, 1200, 1250, 1578, 1700, 1825, and 2000, from which? xi = 20,182,? xi2 = 24,656,384. What is the maximum possible amount that could be awarded under the two-standard-deviation rule? (Round your answer to the nearest whole number.)

Question

Mathematics

Sage Conrad

13 June, 11:56

A woman sued a computer keyboard manufacturer, charging that her repetitive stress injuries were caused by the keyboard. The injury awarded about $3.5 million for pain and suffering, but the court then set aside that award as being unreasonable compensation. In making this determination, the court identified a "normative" group of 27 similar cases and specified a reasonable award as one within two standard deviations of the mean of the awards in the 27 cases. The 27 awards were (in $1000s) 36, 62, 73, 114, 139, 140, 148, 154, 238, 290, 340, 410, 600, 750, 750, 750,1050, 1100, 1135, 1150, 1200, 1200, 1250, 1578, 1700, 1825, and 2000, from which? xi = 20,182,? xi2 = 24,656,384. What is the maximum possible amount that could be awarded under the two-standard-deviation rule? (Round your answer to the nearest whole number.)

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Answers (1)

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Davis Blair · Answer 1

variance = (27*24656384-20182^2) / (27*26) = 368104.3

standard devaition SD = sqrt (368104.3) = 606.716

maximum possible amount that could be awarded under the two-standard-deviation rule = mean + 2*SD

= (20182/27) + (2*606.716)

= 1960.913

=$1960913