Question

The national Association of Realtors estimates that 31% of all homes purchased in 2016 were considered investment proporties. If a sample of 600 homes sold in 2016 is obtained what is the probability that 200 or fewer homes were purchased.

Answer 1

Solution :

Using binomial distribution,

= n * p = 600 * 0.31 = 186

= n * p * q = 600 * 0.31 * 0.69 = 11.3287

Using continuity correction ,

P(x 200.5)

= P[(x - ) / (200.5 - 186) / 11.3287]

= P(z 1.28)

= 0.8997

Probability = 0.8997