nikhil007 wrote:
nmohindru wrote:
The median annual household income in a certain community of 21 households is $50,000. If the mean income of a household increases by 10% per year over the next 2 years, what will the median income in the community be in 2 years?
(A) $50,000
(B) $60,000
(C) $60,500
(D) $65,000
(E) Cannot be determined
Should be e)
Mean increasing by certain % doesnt mean that median should increase by same %.
Median will only increase by same % if all data point move ahead by same % but increase of mean does not guarantee that all data points are moving by same % as well.
Hi,
I am a bit confused now,
I thought this was the rule..
" If we increase or decrease each term in a set by the same percent:
Mean will increase or decrease by the same percent.
SD will increase or decrease by the same percent.
so by that if mean increase by 10%, shouldn't all data points move by 10%..?
By the way, above rule was also Highlighted in one of the post by Bunuel Here
ps-questions-about-standard-deviation-85897.htmlam I missing a point here? can someone please explain the concept here?
Reverse of this property is not true: if the mean increases by a certain percent it doesn't necessarily mean that each term increases by the same percent.
Consider the following set: {1, 2, 3} --> mean=median=2 and sum=6. Now, if we increase the mean by 100%, we increase the sum by 100%, so it'll become 12. But new set can be {0, 0, 12}: the third element increased and the first two elements decreased or {2, 2, 8}: the first and the third elements increased and the second remained the same...
You can apply the same logic to the question at hand.
Answer: E.