Question

A sample of 100 companies has been analyzed by size and whether

they pay invoices promptly. The sample has been cross-tabulated into

large/small against fast payers/slow payers. 60 of the companies are

classified as large, of which 40 are slow payers. In total, 30 of all the

companies are fast payers. The probability that a company chosen at

random is a fast paying, small company is

Answer 1

Solution :

We can represents the given date in 2 × 2 table as follows :

	Small	Large	Total
Slow payer	30	40	70
Fast payer	10	20	30
Total	40	60	100

Probability of an event E is given by,

P(E) = Number of favourable outcomes/Total number of outcomes

We have to find P(fast paying and small company).

P(fast paying and small company) = number of small companies that are fast paying/Total number of companies

P(fast paying and small company) = 10/100

P(fast paying and small company) = 0.10

The probability that a company chosen at random is a fast paying, small company is 0.10.