Answer: The required probability is 0.1328.
Explanation:
Since we have given that
n = 5
Probability of success = p = defective rate = 3% = 0.03
Probability of failure = q = 1-p = 1 - 0.03 = 0.97
So, we will use "Binomial distribution":
probability that the first defective occurs in the fifth item inspected would be

Hence, the required probability is 0.1328.