Problema Solution
An insurance company has discovered that only about 0.1% of the population is involved in a certain type of accident each year. if it 10000 policy holders were randomly selected from population.what is the probability that more than 5 of its clients are involved in such as accident next year?
Answer provided by our tutors
because of the very low probability, poisson suits
poisson mean m, = 10,0000*0.1/100 = 10
P[x] = e^-m*m^x/x!
P[≤5] = sum e^-10(10^x/x!), x = 0 to 5 = .0671 <----