According to a census, approximately 4% of the population earned between $75,000

Question

According to a census, approximately 4% of the population earned between $75,000 and $100,000 annually in 2008. A random sample of 25 people in the population was selected.

a. Use the binomial distribution to determine the probability that fewer than three individuals earned between $75,000 and $100,000 annually in 2008.

b. Use the Poisson approximation to the binomial distribution to determine the probability that fewer than three individuals earned between $75,000 and $100,000 annually in 2008.

a) The probability is

b) The probability is

Explanation / Answer

Here n=25 and p=0.04

np=1

a. P(x<3)=0.9235

b. Here we will use Poisson distribution with lembda=1

P(x<3)=0.9197

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