Question

In a city, 60% of the residents live in houses and 40% of the residents live in apartments. Of the people who live in houses, 20% own their own business. Of the people who live in apartments, 10% own their own business. If a person owns his or her own business, find the probability that he or she lives in a house.

Answer 1

75%; so if we say there are 100 people in this city that means 60 of them live in houses and 40 of them live in apartments. Of the 60 living in houses 20% of them (12% of total population; 60 x .20) own their own business and those in apartments (40) 10% of them (4% of total pop.; 40 x .10) have their own business. In total 16 of the 100 people have businesses and 12 of those people live in houses so 12/16 equals .75. We multiply this by 100 to get the percent so there’s 75% that a person who owns a business in this city will also live in a house.