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Parents may help to save for their children’s university education using Registered Education Savings Plans (RESPs). Under the Canada Education Savings Grant Program, the government matches 20% of the parent’s contributions to an RESP (to an annual maximum). In addition, the income earned within an RESP is not taxed (the tax liability is deferred until the money is used for post-secondary eduation).
In 2000, 7.2% of taxpayers with children under the age of 19 contributed to an RESP.
An elementary school has 16 classrooms, each with 1 teacher and 20 students. During Parent-Teacher Interviews, each teacher asks the parents of the students in his or her class if they are contributing to an RESP for their son or daughter.
(a) What is the expected number of parents who contribute (for a given class).
(b) What is the probability that more than half of parents are contributing in a given
(c) What is the probability that 1/4 of the classes report more than 3 parents contributing?