Question

# A company audit showed that of all bills that were sent out, 75% of them were...

A company audit showed that of all bills that were sent out, 75% of them were paid on time, 18% were paid up to 30 days late, 5% were paid between 31 and 90 days late, and 2% remained unpaid after 90 days. One bill is selected at random.

NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part.

A. What is the probability that the bill was paid on time? (Round the final answer to two decimal places.)

B. What is the probability that the bill was paid late?

According to given,

75% of the bills were paid on time.

Probability that a selected bill is paid on time = 0.75

18% were paid up to 30 days late

Probability that a selected bill is paid up to 30 days late = 0.18

5% were paid between 31 and 90 days late

Probability that a selected bill is paid in between 31 and 90 days late = 0.05

2% remained unpaid after 90 days.

Probability that a selected remained unpaid after 90 days = 0.02

Probability that the bill was paid on time = 0.75 (as given above)

Probability that the bill was paid late =

Probability that a selected bill is paid up to 30 days late + Probability that a selected bill is paid in between 31 and 90 days late = 0.18 + 0.05 = 0.23

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