Using the insurance company's assumptions, calculate the probability that there are fewer than 3 tornadoes in a 14-year period. Round your answer to four decimal places.

 19.2222

Step-by-step explanation:

given data;

no of tornadoes = 2,1,0 because it’s fewer than 3.

period = 14 years

probability of a tornado in a calendar year = 0.12

solution:

probability of exactly 2 tornadoes

= ( 0.12 )^2 * ( 0.88 )^11 * ( 14! / 2! * 11! )

= 0.0144 * 0.2451 * 1092

= 3.8541

probability of exac one tornado

= ( 0.12 )^1 * ( 0.88 )^12 * ( 14! / 1! * 12! )

= 0.12 * 0.2157 * 182

= 12.7109

probability of exactly 0 tornado

= ( 0.12 )^0 * ( 0.88 )^13 * ( 14! / 0! * 13! )

= 1 * 0.1898 * 14

= 2.6572

probability if fewer than 3 tornadoes

= 3.8541 + 12.7109 +2.6572

= 19.2222

$5.41

step-by-step explanation:

$20 - $14.51 = $5.49.

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