Question

All day laborers of a large manufacturing company receive a 2% raise every 6 months. The current mean hourly wage earned by the all day laborers is $9.75 per hour and the standard deviation of their hourly wages is $0.87 per hour. Assuming that the raise rate and frequency remain the same, what will the mean and standard deviation of the hourly wages earned by day laborers be 2 years from now

Answer 1

Answer:

$\=x'=\ 10.55$

$\sigma'=10.55$

Step-by-step explanation:

From the question we are told that:

Raise$r=2\%$ at Time interval 6 months

Time $t=2 years$

Mean hourly pay $\=x= 9.75$

Standard deviation$\sigma=\ 0.87$

Generally the equation for mean is mathematically given by

 $\=x=P*(1+r)^n$

Where

 $P=Principle\ mean$

 $n=number\ of\ intervals$

 $n=2years/6months$

 $n=4$

Therefore

 $\=x'=9.75*(1+0.02)^4$

 $\=x'=\ 10.55$

Generally the equation for Standard deviation is mathematically given by

 $\sigma'=P'*(1+r)^n$

Where

 $P'=Principle\ Standard\ deviation$

Therefore

 $\sigma'=0.87*(1+0.02)^4$

 $\sigma'=10.55$