Question

Suppose you read that 29% of your type of clients do not pay their invoices in the U.S. You have 53 clients. What is the probability that 9 or more of your clients will be the type to not pay their invoices? Hint: Discrete data trying to use the Z formula so you must correct for continuity.

when I use 8.5 or 9.5?!

Answer 1

Solution:

Given:

p = probability of your type of clients do not pay their invoices in the U.S. = 0.29

n = 53

We have to find:

P( 9 or more of your clients will be the type to not pay their invoices ) =..........?

We add or subtract continuity correction 0.5 in x value depending on inequality:

If inequaluity is of the type > , then we add 0.5, in order to exclude x value from the range.

If inequaluity is of the type < , then we subtract 0.5, in order to exclude x value from the range.

If inequaluity is of the type , then we subtract 0.5, in order to include x value in the range.

If inequaluity is of the type , then we add 0.5, in order to include x value in the range.

Since we have inequaluity of the type , we subtract 0.5, in order to include x value in the range.

thus we get:

Now find mean and standard deviation :

Now find z value for x = 8.5

thus we get:

Look in z table for z = -2.0 and 0.08 and find corresponding area.

P( Z< -2.08) = 0.0188

Thus