Question

In the Ardmore Hotel, 20 percent of the guests (the historical percentage) pay by American Express credit card. (a) What is the expected number of guests until the next one pays by American Express credit card? Expected number of guests (b) What is the probability that the first guest to use an American Express is within the first 10 to checkout? (Round your answer to 4 decimal places.) Probability

Answer 1

Answer:

(a) The expected number of guests until the next one pays by American Express credit card is 4.

(b) The probability that the first guest to use an American Express is within the first 10 to checkout is 0.0215.

Step-by-step explanation:

The random variable X can be defined as the number of guests until the next one pays by American Express credit card

The probability that a guest paying by American Express credit card is, p = 0.20.

The random variable X follows a Geometric distribution since it is defined as the number of trials before the first success.

The probability mass function of X is:

$P(X=x)=(1-p)^{x}p;\ x=0,1,2,3...,\ 0$

(a)

The expected value of a Geometric distribution is:

$E(X)=\frac{1-p}{p}$

Compute the expected number of guests until the next one pays by American Express credit card as follows:

$E(X)=\frac{1-p}{p}$

         $=\frac{1-0.20}{0.20}$

         $=4$

Thus, the expected number of guests until the next one pays by American Express credit card is 4.

(b)

Compute the probability that the first guest to use an American Express is within the first 10 to checkout as follows:

$P(X=10)=(1-0.20)^{10}\times0.20$

                 $=0.1073741824\times 0.20\\=0.02147483648\\\approx0.0215$

Thus, the probability that the first guest to use an American Express is within the first 10 to checkout is 0.0215.