The financial manager of a national warehouse chain has found from previous experience that 45% of clients pay by credit card, 35% pay on account, while the remainder pay using cash. He wishes to know if this is still the case. A random sample of 1000 sales receipts from the last month produced the following results: Payment Method Credit Card Account Cash Total Number of receipts 500 315 185 1000 Using a 1% significance level, test whether the payment method pattern has changed.
Compound Probability
Compound probability can be defined as the probability of the two events which are independent. It can be defined as the multiplication of the probability of two events that are not dependent.
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Probability theory is a branch of mathematics that deals with the subject of probability. Although there are many different concepts of probability, probability theory expresses the definition mathematically through a series of axioms. Usually, these axioms express probability in terms of a probability space, which assigns a measure with values ranging from 0 to 1 to a set of outcomes known as the sample space. An event is a subset of these outcomes that is described.
Conditional Probability
By definition, the term probability is expressed as a part of mathematics where the chance of an event that may either occur or not is evaluated and expressed in numerical terms. The range of the value within which probability can be expressed is between 0 and 1. The higher the chance of an event occurring, the closer is its value to be 1. If the probability of an event is 1, it means that the event will happen under all considered circumstances. Similarly, if the probability is exactly 0, then no matter the situation, the event will never occur.
The financial manager of a national warehouse chain has found from previous
experience that 45% of clients pay by credit card, 35% pay on account, while the remainder pay using cash. He wishes to know if this is still the case. A random sample of 1000 sales receipts from the last month produced the following results:
Payment Method
Credit Card Account Cash Total
Number of receipts 500 315 185 1000
Using a 1% significance level, test whether the payment method pattern has changed.
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