Question

The Department of Commerce in a state has determined that the number of small businesses that declare bankruptcy per month is approximately a Poisson distribution with a mean of 3.4. Find the probability that more than 3 bankruptcies occur next month.

Answer 1

0.44164

Explanation:

Given that :

Mean (λ) = 3.4

probability that more than 3 bankruptcies occur next month

Using the poisson distribution formula :

P(x ; λ) = P[(e^-λ) * (λ^x)] ÷ x!

Probability of obtaining more than 3 bankruptcies :

To save computation time, we can use the poisson distribution calculator :

P(x >3 ; λ = 3.4)

P(x > 3) = 0.44164

P(x > 3) = 0.44164