Five percent of all items sold by a mail-order company are returned by customers for a refund. Find the probability that of two items sold during a given hour by this company both will be returned for a refund
experiment for n=400, p=0.06, where p is the probability of a success
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Assuming that the percentage applies to an hour,
First item p=.05
Second item p = .05
The probability of all/both probabilities occurring is found by multiplying the individual probabilities.
To find the probability that both items will be returned for a refund, we need to multiply the probabilities of each item being returned.
Let's start by finding the probability of one item being returned. We are given that 5% of all items are returned, so the probability of one item being returned is 0.05 or 5% (written as 0.05 in decimal form).
Since the probability of one item being returned is 0.05, the probability of both items being returned is obtained by multiplying this probability by itself:
P(both items returned) = P(item 1 returned) * P(item 2 returned) = 0.05 * 0.05 = 0.0025 or 0.25% (written as 0.0025 in decimal form).
Therefore, the probability that both items sold during a given hour by this company will be returned for a refund is 0.0025 or 0.25%.