Question

Jason inherited a piece of land from his great-uncle. Owners in the area claim that there is a 45% chance that the land has oil. Jason decides to test the land for oil. He buys a kit that claims to have an 80% accuracy rate of indicating oil in the soil. What is the probability that the land has oil and the test predicts it? Show solution.

Answer 1

P ( A ) = 0.45  - probability that the land has oil,
P ( B ) = 0.8   - probability that the test predicts it
P ( A ∩ B ) = P ( A ) · P ( B ) = 0.45 · 0.8  = 0.36
Answer: The probability that the land has oil and the test predicts it is 36 %.