Note: Answer the Question(s) by Using the TI-30XA (or other approved) Calculator

Question

Note: Answer the Question(s) by Using the TI-30XA (or other approved) Calculator. IMPORTANT: Make sure you carry all decimals until you reach your answer, then round to four decimals. The Better Business Bureau settles 65% of complaints it receives involving new car dealers. Suppose a sample of 120 complaints involving new car dealers is selected. Find the probability that Better Business Bureau settles less than 88 of these complaints. (See exercise 35 on page 332 of your textbook for a similar problem.) Probability

Explanation / Answer

Probability that Better Business Bureau settles a complaint p = 0.65

Number of samples n = 120

We have p' = 88/120 = 0.73

np = 120*0.65 = 78

n(1-p) = 120*0.35 = 32

Since both values are greater than 10, we can go for a normal distribution

z = (p' - p) / [(p(1-p)/n)]

= (0.73 - 0.65) / [(0.65(1-0.65)/88)]

= 0.08 / 0.051

= 1.57

From Z table we get the probability corresponding to 1.57 as 0.9418

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