Question

Please show work!! OR at least tell me how to set up the problem so I can try if you don't have enough information!

Using data on total errors from Exhibit 3 (total errors -655, total slots checked-36,000), calculate the probability of the proportion of errors exceeding 2%. Assume a total of 8000 transactions per day (n-8000). This question can be answered using the material on sampling distribution of

Answer 1

let p = proportion of errors = 655/36000 p = 0.0182 v Given that n = 8000 let p = sample proportion of errors sample Using Normal approximation to binomial p~ Normal (mu = p, sigma = squareroot p(1-p)/n) Now p[p > 0.02] = p[p-p/squareroot > 0.02-p/squareroot p(1-p)/n = p[z > 0.02-0.0182/squareroot 0.0182 times 0.9818/8000 = p[z > 1.2046] = 0.1142