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). 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%?
$$\begin{array} { l | l l l l l }
\text { Interest Rate } & 7.0 \% & 7.5 \% & 8.0 \% & 8.5 \%& 8.5 \% \
\hline \text { Probability } & 0.12 & 0.23 & 0.24 & 0.35 & 0.06
\end{array}$$
A) 0.06
B) 0.59
C) 0.41
D) 1.00

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). 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%?
$$\begin{array} { l | l l l l l } 
\text { Interest Rate } & 7.0 \% & 7.5 \% & 8.0 \% & 8.5 \%& > 8.5 \% \
\hline \text { Probability } & 0.12 & 0.23 & 0.24 & 0.35 & 0.06
\end{array}$$
A) 0.06
B) 0.59
C) 0.41
D) 1.00

Quizplus · Accepted Answer

The probability that the interest rate exceeds 8.0% is the sum of the probabilities for 8.5% and >8.5%, which is 0.35 + 0.06 = 0.41.

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