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Records over the past year show that 1 out of 355 loans made by Mammon Bank have defaulted. Find the probability that 5 or more out of 300 loans will default. Hint: Is it appropriate to use the Poisson approximation to the binomial distribution? (Round λ to 1 decimal place. Use 4 decimal places for your answer.)

Question

Records over the past year show that 1 out of 355 loans made by Mammon Bank have defaulted. Find the probability that 5 or more out of 300 loans will default. Hint: Is it appropriate to use the Poisson approximation to the binomial distribution? (Round λ to 1 decimal place. Use 4 decimal places for your answer.)

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Step 1

Given that over past year 1 out of 355 loans made by Mammon bank have defaulted.

Here it is appropriate to use the poisson distribution as the event of loan default occurred over a period of time.
The total number of loa...

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