May is interested in purchasing the local hardware store in her hometown. After examining the store accounts for the past two years, she found that the store had been earning a gross amount of over $850 per day for 70% of the business days it was open. A random sample of n = 20 business days is selected from the last two years. Let X represent the number of days where the store earned over $850 gross. 1. If the value of p was 0.6, calculate P(X < 6) for a sample of n = 20. 2. Suggest a value of p that might mean that May would not have been surprised to find the store grossed over $850 for fewer than 6 business days, briefly explaining your answer.
May is interested in purchasing the local hardware store in her hometown. After examining the store accounts for the past two years, she found that the store had been earning a gross amount of over $850 per day for 70% of the business days it was open. A random sample of n = 20 business days is selected from the last two years. Let X represent the number of days where the store earned over $850 gross.
1. If the value of p was 0.6, calculate P(X < 6) for a sample of n = 20.
2. Suggest a value of p that might
Given:
n = 20
p = 0.6
Formula Used:
Binomial distribution:
XB(n, p)
Mean = np
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