1154 words - 5 pages

Statistical Analysis

On February 18, 2006, Mrs. Kim requested that Baron Art Mart, Inc. compensate her for the permanent injuries inflicted on her by one of their employees while falsely imprisoning her on January 3, 2006. Since the injury left her with a permanent disability that wont allow her to work for the next ten years until her retirement, she is demanding compensation of $765,000 in medical expenses and $500,000 for her loss of future income. Mrs. Kim has provided us with her yearly gross income from her sales position at a pharmaceutical company called Derk from the past fifteen years. I will use Mrs. Kim’s yearly gross income to determine her projected real income for the next ...view middle of the document...

Once all this data was calculated, we were able to find the median, mean, standard deviation, and variance for Mrs. Kim’s last fifteen years real income. The mean is the average amount of a set of numbers. The mean of Mrs. Kim’s real income between 1991 and 2005 is $37,760.87 which shows the average amount from all the gross income numbers. Since Mrs. Kim will be unable to work for the next ten years due to her injury, we use the mean of $37,760.87 as the base amount for her future real income. The median is the middle value of a set of numbers. From the information provided by Mrs. Kim, the median for her real past income is $37,853.88. Standard deviation is the measurement of how far the values are from the mean. The standard deviation that was calculated from Mrs. Kim’s past real income is $653.09. This means that her past income will range from $653.09 above or below the mean of her past income. Finally, the variance in any given set of data is the representation of the scattering of data values around the mean of a given sample. The variance is also the square of the standard deviation with most of the data lying in 95% of the mean. Mrs. Kim’s variance for her real past income is $426528.66.

Number Year Gross Income Price Index Adjusted Price Index Real Income

1 1991 50,599 136.2 1.362 37150.51

2 1992 53,109 140.3 1.403 37853.88

3 1993 53,301 144.5 1.445 36886.51

4 1994 56,885 148.2 1.482 38383.94

5 1995 56,745 152.4 1.524 37240.16

6 1996 60,493 156.9 1.569 38555.13

7 1997 61,978 160.5 1.605 38615.58

8 1998 61,631 163.0 1.630 37810.43

9 1999 63,297 166.6 1.666 37993.39

10 2000 66,531 172.2 1.722 38635.89

11 2001 67,600 177.1 1.771 38170.53

12 2002 66,889 179.9 1.799 37181.21

13 2003 70,024 184.0 1.840 38056.52

14 2004 70,056 188.9 1.889 37086.29

15 2005 71,857 195.3 1.953 36793.14

Mean 37760.87

Median 37853.88

Variance 426528.661800666

Standard Deviation 653.0916182288

After completing these calculations, it is determined that Mrs. Kim’s future real income is $37,760.87. The next step to perform is a...

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