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Question

# The monthly household incomes of 8 families are given as: {45000, 50000, 75000, 60000, 48000, 54000, 68000 and 150000} Find the average income. Does the mean income give a fair idea of the average household income?

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Solution

## Mean household income = Sum of IncomesNumber of Households = 45000+50000+75000+60000+48000+54000+68000+1500008 = 5500008 = 68750 If we don't take the final value into consideration, since it is way above the rest of the households, we get : Mean = 45000+50000+75000+60000+48000+54000+680007 = 57142.85, which is 11607 less than the mean income if taken for all 8 households. 6 values of incomes out of 8 lie below the mean, which means this is not a correct projection for the Average. Thus, the mean income does not give a fair idea of the average household income for this data.

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