The probability that house sales will increase in the next 6 months is estimated to be 0.25. The probability that the interest rates on housing loans will go up in the same period is estimated to be 0.74. The probability that house sales or interest rates will go up during the next 6 months is estimated to be 0.89. What is the probability that neither house sales nor interest rates will increase during the next 6 months?
A) 0.90
B) 0.11
C) 0.195
D) 0.89

Question

Quizplus · Accepted Answer

The probability that at least one of the events will occur is given by:

P(House sales or interest rates will go up) = P(House sales) + P(Interest rates will go up) - P(House sales and interest rates will go up)

0.89 = 0.25 + 0.74 - P(House sales and interest rates will go up)

P(House sales and interest rates will go up) = 0.10

Therefore, the probability that neither house sales nor interest rates will increase during the next 6 months is:

P(neither will increase) = 1 - P(at least one will increase)

P(neither will increase) = 1 - 0.89

P(neither will increase) = 0.11

So, the answer is B.

The Probability That House Sales Will Increase in the Next