More than 40 million Americans are estimated to have at least one outstanding student loan to...
More than 40 million Americans are estimated to have at least one outstanding student loan to help pay college expenses ("40 Million Americans Now Have Student Loan Debt", CNNMoney, September 2014). Not all of these graduates pay back their debt in satisfactory fashion. Suppose that the following joint probability table shows the probabilities of student loan status and whether or not the student had received a college degree. If needed, round your answers to three decimal digits.
| College Degree | ||||
| Yes | No | |||
| Loan Status |
Satisfactory | 0.36 | 0.24 | 0.60 |
| Delinquent | 0.16 | 0.24 | 0.40 | |
| 0.52 | 0.48 | |||
| (a) | What is the probability that a student with a student loan had received a college degree? |
| (b) | What is the probability that a student with a student loan had not received a college degree? |
| (c) | Given that the student has received a college degree, what is the probability that the student has a delinquent loan? |
| (d) | Given that the student has not received a college degree, what is the probability that the student has a delinquent loan? |
| (e) | What is the impact of dropping out of college without a degree for students who have a student loan? |
| - Select your answer -ObtainingNot obtainingItem 5 a college degree will lead to a greater probability of struggling to payback the student loan and will likely lead to financial problems in the future |
Homework Answers
a)
probability that a student with a student loan had received a college degree =0.52
b) probability that a student with a student loan had not received a college degree =0.48
c)
P( a delinquent loan |college degree)=0.16/0.52 =0.3077
d)
P( a delinquent loan |no college degree)=0.24/0.48 =0.5
e)
Not obtaining a college degree will lead to a greater probability of struggling to payback the student loan and will likely lead to financial problems in the future
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