In an article about investment alternatives, Money magazine reported that drug s

Question

In an article about investment alternatives, Money magazine reported that drug stocks provide a potential for long-term growth, with over 53% of the adult population of the United States taking prescription drugs on a regular basis. For adults age 65 and older, 82% take prescription drugs regularly. For adults age 18 to 64, 44% take prescription drugs regularly. The age 18–64 age group accounts for 85.3% of the adult population (Statistical Abstract of the United States, 2008).

Round your answers to 4 decimal places.

a. What is the probability that a randomly selected adult is 65 or older?

b. Given an adult takes prescription drugs regularly, what is the probability that the adult is 65 or older?

Explanation / Answer

a) We need to find probability that a randomly selected adult is 65 or older. Let this be x

thus, 0.82*x+0.44*0.853=0.53 , this is x=(0.53-0.44*0.853)/0.82 =18.86%

b) P( adult is 65 or older|adult takes prescription drugs regularly)= P(adult is 65 or older| adult takes prescription drugs regularly)/P(adult takes prescription drugs regularly)

= 0.82*0.1886/0.53 =29.17%

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