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Nov 2012 p61 q5
3042
A company set up a display consisting of 20 fireworks. For each firework, the probability that it fails to work is 0.05, independently of other fireworks.
(i) Find the probability that more than 1 firework fails to work.
The 20 fireworks cost the company $24 each. 450 people pay the company $10 each to watch the display. If more than 1 firework fails to work they get their money back.
(ii) Calculate the expected profit for the company.
Solution
(i) The number of fireworks that fail follows a binomial distribution with parameters \(n = 20\) and \(p = 0.05\). We need to find \(P(X > 1)\).