In an insurance company, each policy has a paper record and an electric record. For those policies having incorrect paper record, 60% also have incorrect electric record; For those policies having incorrect electric record, 75% also having incorrect paper record. 3% of all policies have both incorrect paper and incorrect electric
records. If we randomly pick out one policy, what's the probability
that the one having both correct paper and correct electric records?
Please explain steps..
ok..heres the answer
we use one of the most important probability concepts
P( correct paper and correct electric) = 1- P ( incorrect paper and incorrect electric)
Let T be total policies
Let x be total incorrect paper policies
Let y be total incorrect electric policies
It follows from the problem statement that
0.03T is the number of both incorrect electric and paper policies
0.6x is the number of both incorrect electric and paper ..
0.75y is the number of both incorrect electric and paper...
So now that all are the same, we have
0.03 T = 0.6 x = 0.75 y
x = 0.03 T/0.6 = 5% * T
y= 0.03 T/0.75 = 4 % * T
Vicky , x + y double counts the "BOTH" incorrect part.
So total incorrect paper OR total incorrect electric = x +y - both incorrect
5% T + 4% T - 3% T = 6%
Required Prob = 1 - 0.06 = 0.94