The company goes bankrupt if the first year with losses or no profit is followed by another year of losses or no profit. What is the probability that the company goes bankrupt within the first 10 years of existence? The probability that bank losses or no profit for each year is P.
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bankrupt possible when banks shows loss or no profit in atleast 2 consecutive year ...
so either it can be in 1st and 2 year ... or 2nd and 3rd year .... and so on ...
now understand this , except these two years , other year have no objection , means in other year bank shows profit or loss ..
so , probability of bankrupt within 10 years = p^2 + p^2 + --- + p^2 = 9p^2
answer = 9 p^2
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