SOLUTION: Five percent of all items sold by mail-order company are returned by customers for a refund. Find the probability (and show the tree diagram) that two of the items sold during a

Question 1203083: Five percent of all items sold by mail-order company are returned by customers for a refund.
Find the probability (and show the tree diagram) that two of the items sold during a given hour by this company
a. Both will be returned for a refund
b. Neither will be returned for a refund
Answer by ikleyn(52781) (Show Source): You can put this solution on YOUR website!
.
Five percent of all items sold by mail-order company are returned by customers for a refund.
Find the probability (and show the tree diagram) that two of the items sold by this company
a. Both will be returned for a refund
b. Neither will be returned for a refund
~~~~~~~~~~~~~~~~~~

(a)  P = 0.05*0.05 = 0.0025.    ANSWER


     Returning two items are two independent events with the probability
     of 0.05 each.   Therefore, we multiply the probabilities.


(b)  P = (1-0.05)*(1-0.05) = 0.95*0.95 = 0.9025.    ANSWER


     Non-returning two items are two independent events with the probability
     of  1-0.05 = 0.95 each.   Therefore, we multiply the probabilities.

Solved (with explanations).

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