ECON 3205 Money Financial, Inc., indicated that parents with college students ha

Question

ECON 3205 Money Financial, Inc., indicated that parents with college students have provided financial assistance to their children at college to pay rent and or buy a car Suppose a statistical analyst suggests that the probability that parents buy a car for their college kids is 45.58%, that parents pay rent for their college kids is 35.67%; that parents buy a car and pay rent for their college kids is 28.4296, and that parents pay rent and will not buy a car is 7.25%. If parents provided financial assistance to buy a car, what is the probability that the parents assisted with paying rent? Clearly show your steps and manual (hand and calculator) calculations in 4 decimal places.

Explanation / Answer

Here, in this case, we need to take those parents who provided assistance in buying a car which is 45.58 and out of those who provided assistance to pay the rent. Hence, it would be calculated as follows: -

P(Paying rent|Buying car)=28.42/45.58=0.62352

Buy a car Not buy a car Total Pay rent 28.42 7.25 35.67 Not pay rent 17.16 47.17 64.33 Total 45.58 54.42 100

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