Due to high operational cost, Herrizon Commercial Bank (HCB) wishes to close
those savings accounts that do not maintain a certain minimum monthly
balance. Currently the mean monthly balance of the savings accounts is Sh.
25,000 with a standard deviation of Sh. 5,000. The bank wishes to close 10%
of the accounts with the lowest monthly balance. Further, the balances are
assumed to be normally distributed.
Required:
The monthly balance that HCB should require its savings accounts customers
to maintain in order for the accounts not to be closed. (10
marks)