Suppose Blue Cab Company charges $2.85 a ride up to 0.1 miles and $0.30 for each additional tenth of a mile. If the mean distance a passenger wants to go is 5.3 miles with a standard deviation of 1.4 miles, what is the mean of the fare passengers pay?
Question
Suppose Blue Cab Company charges 0.30 for each additional tenth of a mile. If the mean distance a passenger wants to go is 5.3 miles with a standard deviation of 1.4 miles, what is the mean of the fare passengers pay?
Solution
To calculate the mean fare passengers pay, we first need to determine the cost for the average distance a passenger travels.
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The first 0.1 miles cost $2.85.
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The remaining distance is 5.3 miles - 0.1 miles = 5.2 miles.
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We then need to convert this remaining distance into tenths of a mile, as the company charges per each additional tenth of a mile. So, 5.2 miles * 10 = 52 tenths of a mile.
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The cost for these additional tenths of a mile is 52 * 15.60.
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Adding this to the initial 2.85 + 18.45.
So, the mean fare passengers pay is $18.45. The standard deviation is not needed for this calculation.
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