An insurance company prices its Tornado Insurance using the following assumptions: • In any calendar year, there can be at most one tornado. In any calendar year, the probability of a tornado is 0.08. • The number of tornadoes in any calendar year is independent of the number of tornados in any other calendar year. Using the insurance company's assumptions, calculate the probability that there are fewer than 3 tornadoes in a 20-year period. Round your answer to four decimal places.
An insurance company prices its Tornado Insurance using the following assumptions: • In any calendar year, there can be at most one tornado. In any calendar year, the probability of a tornado is 0.08. • The number of tornadoes in any calendar year is independent of the number of tornados in any other calendar year. Using the insurance company's assumptions, calculate the probability that there are fewer than 3 tornadoes in a 20-year period. Round your answer to four decimal places.
Chapter8: Sequences, Series,and Probability
Section8.7: Probability
Problem 11ECP: A manufacturer has determined that a machine averages one faulty unit for every 500 it produces....
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Transcribed Image Text:An insurance company prices its Tornado Insurance using the following assumptions:
●
In any calendar year, there can be at most one tornado.
• In any calendar year, the probability of a tornado is 0.08.
●
The number of tornadoes in any calendar year is independent of the number of tornados in any other
calendar year.
Using the insurance company's assumptions, calculate the probability that there are fewer than 3 tornadoes
in a 20-year period. Round your answer to four decimal places.
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