Question

The financial records of businesses may be audited by state tax authorities to test compliance with tax laws. Suppose the auditors examine a simple random sample of 150 sales records out or 10,000 available. One issue is whether each sale was correctly classified as subject to state sales tax or not. Suppose that 700 of the 10,000 are incorrectly classified. Use normal distribution to find the approximate probability that the number of misclassified sales in the sample is less than 10. Give justification for all approximations used.

Answer 1