**Understanding Consumer Spending Methods**In a survey on consumer spending methods, the following results were obtained:| Payment Method | Transactions (%) ||----------------|------------------|| Checks | 37 || Cash | 14 || Credit Cards | 20 || Debit/ATM Cards| 19 || Other | 10 |**Probability Questions from the Survey Results**When analyzing the survey data, if a transaction tracked in this survey is selected at random, we can determine the likelihood of different payment methods being used.**Questions:**(a) What is the probability that the transaction was paid for by a credit card or a debit/ATM card?*(b) What is the probability that the transaction was paid for with cash or some method other than with a check, a credit card, or a debit/ATM card?**Need Help?** [Read It]---Explanation of Probabilities:1. **Credit Card or Debit/ATM Card:** To find the probability of a transaction being made with either a credit card or a debit/ATM card, sum the percentages of transactions made with these two methods: \[ P(\text{Credit Card or Debit/ATM Card}) = P(\text{Credit Card}) + P(\text{Debit/ATM Card}) = 20\% + 19\% = 39\% \]2. **Cash or Other Methods:** For cash or other methods, add the percentages of transactions made with these methods: \[ P(\text{Cash or Other Methods}) = P(\text{Cash}) + P(\text{Other}) = 14\% + 10\% = 24\% \]---This data helps us understand the prevalence of different payment methods and assists in predicting consumer behavior.

Probability refers to the likelihood or chance of an event occurring. It is a numerical measure that…

Answered: In a survey on consumer spending…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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