1. Suppose a tire manufacturer wants to set a mileage guarantee on its new XB 70 tire. Tests revealed that the tire's mileage is normally distributed with a mean of 47,900 miles and a standard deviation of 1,750 miles. The manufacturer wants to set the guaranteed mileage so that no more than 2% of the tires will have to be replaced. What guaranteed mileage should the manufacturer announce?

2

Mr. Rich Mann, is the credit manager of MCC Inc. Mr.Mann would like to estimate the cost of credit sales. From experience, credit customers have paid their bills in an average of 40 days and a standard deviation of 12 days. Customers who pay their bills in 10 days receive a 2% discount. Accounts that are not paid within 75 days are written off as bad debts. (Assume a normal distribution)

1. What percentage of accounts is within 25 and 60 days old?
2. What percentage of the accounts is written off as bad debts or receives the discount