Question

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. Find the probability that house sales will increase but interest rates will not during the next 6 months.

Answer 1

P(house)+P(interest)-P(both)=probability of P. Both subtracts the double counting.

0.25+0.74-P(Both)=0.89

P=0.10

P(neither) is the complement of P(either), which is OR. That is 1-0.89=0.11

If I can assume independence, which probably is not correct since the two are related, it is P(H)*P(not I)=0.25*0.26=0.065. Not I is 1-P(I)=0.26