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    chance the interest rate charged on home loan will exceed 8%

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    A recent survey of banks revealed the following distribution for the interest rate being charged on a home loan (based on a 30-year mortgage with a 10% down payment).

    Interest Rate 7.0% 7.5% 8.0% 8.5% >8.5%
    Probability 0.12 0.23 0.24 0.35 0.06

    If a bank is selected at random from the distribution, what is the chance that the interest rate charged on a home loan will exceed 8.0%?
    1. 0.06 2. 0.41 3. 0.59 4. 1.00.

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    Solution Summary

    The solution explains how to find the probability that the interest rate charged on home loan will exceed 8%.

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