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Question

The annual incomes of 1,000 families range from 8200 dollars to 98,000 dollars. In error, the largest income was entered on the computer as 980,000 dollars. The difference between the mean of the incorrect data and the mean of the actual data is

Accepted Answer

Let S be the sum of all the incomes but the largest one. For the actual data, the mean is S+980001000, and for the incorrect data the mean is S+9800001000. The difference is 882, or 882 dollars This assumes that incomes of all the families are unique. Otherwise, more than one family could have $98000 as income and the above reasoning will not work.