Question

Based on past experience, a bank believes that 9 % of the people who receive loans will not make payments on time. The bank has recently approved 200 loans.

What assumptions must be true to be able to approximate the sampling distribution with a normal model? Assumptions:
Incorrect

What are the mean and standard deviation of this model? mean =

Correct standard deviation (accurate to 3 decimal places) =
Incorrect

What is the probability that over 10% of these clients will not make timely payments?
Incorrect

Answer 1

Solution :

Given that ,

p = 0.09

1 - p = 0.91

n = 200

Mean :

= p = 0.09

Standard deviation:

= (p*(1-p))/n =  (0.09*0.91)/ 200= 0.020

P( > 0.10) = 1 - P( < 0.10)

= 1 - P(( - ) / < (0.10-0.09) /0.020 )

= 1 - P(z < 0.05)

= 1 - 0.5199

= 0.4801

Probability = 0.4801