The chance of an IRS audit for a tax return with over $25,000 in income is about 2% per year. We are interested in the expected number of audits a person with that income has in a 11-year period. Assume each year is independent.
1. In words, define the Random Variable X.
2. List the values that X may take on.
3. Give the distribution of X.
4. How many audits are expected in a 11-year period? (Round your answer to two decimal places.)
5. Find the probability that a person is not audited at all. (Round your answer to four decimal places.)
6. Find the probability that a person is audited more than twice. (Round your answer to four decimal places.)
Get Answers For Free
Most questions answered within 1 hours.