A recent survey of banks revealed the following distribution for the interest rate being charged on a home loan (based on a 30-year mortgage with a 10% down payment). $$\begin{array} { | l | c | c | c | c | c | }
\hline \text { Interest Rate } & 7.0 \% & 7.5 \% & 8.0 \% & 8.5 \% & 8.5 \% \
\hline \text { Probability } & 0.12 & 0.23 & 0.24 & 0.35 & 0.06 \
\hline
\end{array}$$ If a bank is selected at random from this distribution,what is the chance that the interest rate charged on a home loan will exceed 8.0%?
A)0.59
B)0.06
C)1.00
D)0.41

Question

A recent survey of banks revealed the following distribution for the interest rate being charged on a home loan (based on a 30-year mortgage with a 10% down payment). $$\begin{array} { | l | c | c | c | c | c | } 
\hline \text { Interest Rate } & 7.0 \% & 7.5 \% & 8.0 \% & 8.5 \% & > 8.5 \% \
\hline \text { Probability } & 0.12 & 0.23 & 0.24 & 0.35 & 0.06 \
\hline
\end{array}$$ If a bank is selected at random from this distribution,what is the chance that the interest rate charged on a home loan will exceed 8.0%?
A)0.59
B)0.06
C)1.00
D)0.41

Quizplus · Accepted Answer

From the given distribution, we can see that the cumulative probability of interest rate less than or equal to 8.0% is 0.59. Therefore, the probability of interest rate exceeding 8.0% is 1 - 0.59 = 0.41. The correct answer is D.

A Recent Survey of Banks Revealed the Following Distribution for the Interest