Answer:
a) 0.1108
(b) 0.0173
Step-by-step explanation:
We are given that 20% of all stock investors are retired people. A random sample of 25 stock investors is taken.
Firstly, the binomial probability is given by;
[tex]P(X=r) =\binom{n}{r}p^{r}(1-p)^{n-r} for x = 0,1,2,3,....[/tex]
where, n = number of trails(samples) taken = 25
r = number of successes
p = probability of success and success in our question is % of
retired people i.e. 20%.
Let X = Number of people retired
(a) Probability that exactly seven are retired people = P(X = 7)
P(X = 7) = [tex]\binom{25}{7}0.2^{7}(1-0.2)^{25-7}[/tex]
= [tex]480700*0.2^{7}*0.8^{18}[/tex] = 0.1108
(b) Probability that 10 or more are retired people = P(X >= 10)
P(X >= 10) = 1 - P(X <= 9)
Now, using binomial probability table, we find that P(X <= 9) is 0.98266 at n = 25, p = 0.2 and x= 9
So, P(X >= 10) = 1 - 0.98266 = 0.0173.
