statistics problem-calculating percentile. i will best!!

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A survey of over 1,713 people had an average student load debt of $32,795 (s.d. = $4,997)

who have excessive levels of debt ( >=85th percentile) are more likely to default on their loans. What debt value would mark this amount?

Mar 12th, 2015

You can quickly calculate this in excel or similar, it has a dedicated function for calculating the inverse density function (taking a percentile and converting it to the original statistic):

Norm.inv(P(x),mean,sd) = Norm.inv(0.85,32795,4997) = 37974.05765

So the 85th percentile of the distribution is at 37974.06, so everybody with > $37974.06 debt are considered more likely to default.

Hope this was helpful!


Mar 12th, 2015

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Mar 12th, 2015
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