SOLUTION: Suppose the probability of an IRS audit is 5.3 percent for US taxpayers who file form 1040 and who earned 100,000.00 or more
What are the odds that such a taxpayer would be audi
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Question 1177759: Suppose the probability of an IRS audit is 5.3 percent for US taxpayers who file form 1040 and who earned 100,000.00 or more
What are the odds that such a taxpayer would be audited
What are the odds against such a taxpayer being audited
How do you figure this one out
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
odds and probability are related in the following way.
probability of an event occurring is the number of ways it can happen divided by the total number of ways it can either happen or not happen.
as an example:
a dice had 6 sides with each of the number 1 through 6 printed on each side.
when you roll the dice, one of the numbers is shown on the top side of the dice.
the probability of landing a 1 on top is 1 out of 6 because you have 6 possible numbers to be on the top side of the dice, but only one of them will be a 1.
so the probability of landing a 1 is 1 / 6.
that's the probability of success (landing a 1) divided by the probability of landing any number from 1 to 6.
the odds for an event to occur is the probability of the event occurring divided by the probability of the event not occurring.
the probability of landing a 1 is 1/6.
the probability of not landing a 1 is 5/6.
the odds of landing a 1 are 1/5.
likewise, the odds for an event not occurring is the probability of the event not occurring divided by the probability of the event occurring.
the probability of not landing a 1 is 5/6.
the probability of landing a 1 is 1/6.
the odds of not landing a 1 are 5/1.
note that (1/6) / (5/6) = (1/6) * (6/5) = (1 * 6) / (6 * 5 = 1/5.
note also that (5/6) / (1/6) = (5/6) * (6/1) = 5/1.
applied to your problem, you have:
probability of being audited is .053
probability of not being audited is (1 - .053) = .947.
odds of being audited is .053 / .947 = .0559662091 to 1.
odds of not being audited is .947 / .053 = 17.86792453 to 1.
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