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Scenario : Given the distribution of all IQ scores has a mean (µ) of 100 and standard deviation (σ) of 15 , what's the probability of finding a sample of 30 people with a sample mean IQ score less than 105 ?
What we'll do:
Compute z-score, given our x-value of 105
Find the area under the z-distribution to the left of our z-score (seen in red below) ...
...which will be equal to the p-value corresponding to our z-score!
Created with Statistics Kingdom
The Standard Error (SE) formula occurs in the denominator!
x = 105 µ = 100 σ = 15 n = 30
z = (105 - 100 ) / [15 / √(30 )]z = (5) / [15 / (5.48)]z = (5) / [2.74]z = 1.83
p-value = 0.9664 or 96.64%
Answer : 96.64% is the probability of finding a sample of 30 people with a sample mean IQ score less than 105 .