Disability and Mortgage Foreclosures - People who are injured or ill cannot work

Question

Disability and Mortgage Foreclosures - People who are injured or ill cannot work; and with a lack of income, they cannot make their mortgage payment. Such a mortgage foreclosure is said to be caused by a disability. Suppose that 48% of all mortgage foreclosures in the United States are caused by disability. A large lending institution audits a random sample of 150 foreclosures nationwide during the two years following the 2008 "economic meltdown." What is the approximate probability that at least 75 of these foreclosures were caused by disability?

Explanation / Answer

Normal Approximation to Binomial Distribution
Mean ( np ) =150 * 0.48 = 72
Standard Deviation ( npq )= 150*0.48*0.52 = 6.1188
Normal Distribution = Z= X- u / sd                   
P(X >= 75) = (75-72)/6.1188
= 3/6.1188 = 0.4903
= P ( Z >0.49) From Standard Normal Table
probability that at
least 75 of these foreclosures were caused by disability is = 0.312                  

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.