SOLUTION: Suppose the probability of an IRS audit is 2.1 percent for U.S. taxpayers who file form 1040 and who earned $100,000 or more. What are the odds that such a taxpayer will be audite

Algebra ->  Probability-and-statistics -> SOLUTION: Suppose the probability of an IRS audit is 2.1 percent for U.S. taxpayers who file form 1040 and who earned $100,000 or more. What are the odds that such a taxpayer will be audite      Log On


   

Question 1174148: Suppose the probability of an IRS audit is 2.1 percent for U.S. taxpayers who file form 1040 and who earned $100,000 or more.
What are the odds that such a taxpayer will be audited?
What are the odds against such a taxpayer being audited?
Answer by greenestamps(13196) About Me  (Show Source):
You can put this solution on YOUR website!


P(audit): 2.1% = 0.021

Odds in favor: P(being audited):P(not being audited)
Odds of being audited: .021:(1-.021) = 21:779

Odds against: P(not being audited):P(being audited)
Odds against being audited: (1-.021):.021 = 779:21

NOTE: Odds for or against are often shown as fractions -- e.g., 21/779 and 779/21. However, in fraction form it looks like a probability; so I much prefer the forms 21:779 and 779:21.