Question

A company makes two versions of a particular software product, a standard version and a deluxe version. Out of 25,000 units shipped, 5,000 were the deluxe version. As a part of a promotion, 1 product in every 500 contained a gift certificate. If a product is chosen at random, which is the probability it will be a standard version with a gift certificate?

Answer 1

First, we need to find the probability, P, that the software is the standard version.

Out of 25,000 units, 5,000 were deluxe. That means the remaining 20,000 were standard. So, 20,000 out of 25,000, or $\frac{20000}{25000}$ were standard. That means the probability of selecting a standard one at random is P = 0.8.

Next, we need to find the independent probability that any software box will contain the promotion. We know that 1 in 500 will, or $\frac{1}{500}$. That means P = 0.002. 

To find the compound probability of these two events, we multiply the probabilities together to get $P=(0.8)(0.002)=0.0016$.