I am unsure of how to solve for this The Better Business Bur
I am unsure of how to solve for this.
The Better Business Bureau settles 85% of complaints it receives involving new car dealers. Suppose a sample of 90 complaints involving new car dealers is selected. Find the probability that Better Business Bureau settles less than 83 of these complaints.Solution
I am attaching two possible solutions:
a) If you use binomial distribution for this,
Note that P(fewer than x) = P(at most x - 1).
Using a cumulative binomial distribution table or technology, matching
n = number of trials = 90
p = the probability of a success = 0.85
x = our critical value of successes = 83
Then the cumulative probability of P(at most x - 1) from a table/technology is
P(at most 82 ) = 0.969158509
Which is also
P(fewer than 83 ) = 0.969158509 [ANSWER]
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B)
If you use normal approximation for this,
u = n p = 90*0.85 = 76.5
s = sqrt(n p (1-p)) = sqrt(90*0.85*(1-0.85)) = 3.387476937
We first get the z score for the critical value. As z = (x - u) / s, then as
x = critical value = 82.5
u = mean = 76.5
s = standard deviation = 3.387476937
Thus,
z = (x - u) / s = 1.771229771
Thus, using a table/technology, the left tailed area of this is
P(z < 1.771229771 ) = 0.96173875 [ANSWER]
