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 51% 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, 47% take prescription drugs regularly. The age 18–64 age group accounts for 87.9% 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?

PLEASE SHOW ALL WORK

Explanation / Answer

a)

probability that a randomly selected adult is 65 or older=1-P(18-64 age group) =1-0.879 =0.121

b)

P(prescription drugs regularly)=P(18-64 and prescription drugs regularly)+P(65 or older and prescription drugs regularly)=0.879*0.47+0.121*0.82=0.5124

hence P(65 or older|prescription drugs regularly)

=P(65 or older and prescription drugs regularly)/P(prescription drugs regularly)=0.121*0.82/0.51235 =0.1937

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