Answer:
So, the odds that a taxpayer would be audited 28 to 972 or 2.88%
Step-by-step explanation:
Given
Let P(A) = Probability of irs auditing
P(A) = 2.8%
Let n = number of those who earn above 100,000
To get the odds that taxpayer would be audited, we need to first calculated the proportion of those that will be audited and those that won't.
If the probability is 2.8% then 2.8 out of 100 will be audited. That doesn't make a lot of sense since you can't have 2.8 people; we multiply the by 10/10
i.e.
Proportion, P = 2.8/100 * 10/10
P = 28/1000
The proportion of those that would not be audited is calculated as follows;
Q = 1000 - P
By substituton
Q = 1000 - 28
Q = 972
So, the odds that a taxpayer would be audited 28 to 972 or P/Q
P/Q = 28/972
= 0.0288065844
= 2.88% --- Approximately
