The Town-Pump service station has performed an analysis of itscustomers and has

Question

The Town-Pump service station has performed an analysis of itscustomers and has found that 80% pay on credit and the rest paycash. If five customers are sampled, what is the probability thatthree or fewer of them will pay on credit? I can't figure out what formula to use and what numbers toplug in where...HELP! Thanks The Town-Pump service station has performed an analysis of itscustomers and has found that 80% pay on credit and the rest paycash. If five customers are sampled, what is the probability thatthree or fewer of them will pay on credit? I can't figure out what formula to use and what numbers toplug in where...HELP! Thanks

Explanation / Answer

Given sample size n = 5 customers. customers and has found that 80% pay on credit , That is p=0.8 Let X be the custormer are pay on credit. Here x follows binomial distribution with parameter 5 and0.8 probability that three or fewer of them will pay on credit =P(X<=3) P(x<=3) = 1-[P(x=4) + P(x=5)]             = 1 - [0.4096 + 0.32768]             =0.2627

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