Credit card companies have aggressively solicited new accounts from students who are new homeowners. Suppose that a sample of 150 new homeowners indicated the following information as to whether they possessed a Visa Card or an American Express Card.
American Express Card
Yes | No | Total
Yes 60 | 40 | 100
Visa Card No 20 | 30 | 50
Total 80 | 70 | 150
If a student is selected at random, what is the probability that
a. The new homeowner has a Visa credit card?
b. The new homeowner has an American Express card?
c. The new homeowner has a Visa credit card and an American Express Card?
d. The new homeowner has neither a Visa credit card nor an American Express Card?
e. The new homeowner has a Visa credit card or an American Express Card?
The solution provides step by step method for the calculation of probabilities and conditional probabilities. Formula for the calculation and Interpretations of the results are also included.