The probability that a customer will buy a new car and an extended warranty is 0.16. If the probability that a customer..

The probability that a customer will buy a new car and an extended warranty is 0.16. If the probability that a customer will purchase a new car is 0.30, find the probability that the customer will also purchase the extended warranty

Solutions

Expert Solution

Let:

C indicate when a customer buys a car
W indicate when a customer buys an extended warranty with their purchase of a car

We have:

P(C∩W) = 0.16

P(C) = 0.30

The probability that the customer will also purchase the extended warranty (It implies the customer has purchased the car already):

P(W|C) = P(C∩W)/P(C)

= 0.16/0.30

≈ 0.5333

Therefore, the probability that the customer will purchase an extended warranty with the purchase of a car is approximately 0.5333.

Nabeel answered 1 year ago

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