
And obviously the new mean is 1.2 times the old mean because we're multiplying

everything up by 20% raise that makes a factor of 1.2 over here and zero over here

because we don't really add a constant amount of money per person its variable.

It's a multiplicative change. For the variance it's more interesting.

In our new variance, we multiply each salary by a factor of 1.2 and the same is through for the mean.

When we look at this, we can bring the 1.2 outside these brackets and it becomes (1.2)².

The reason why I squared this, we can bring it outside Xi and u but there's a square over here

and we can move it outside this sum as a factor.

Now this is true for the variance but not the standard deviation.

The standard deviation is cleared of the variance.

The standard deviation was up by factor of 1.2 only, with a constant offset of zero.