Probability

Question

If one check in 10,000 is forged, 6% of all checks are postdated, and 60% of forged checks are postdated, find the probability that a postdated check is forged. (Round your answer to five decimal places.)

Answer 1

(1) "one check in 10,000 is forged" means that .0001 of all checks are forged.

 

(2) 60% of these are postdated, so that means that .00006 of all checks are forged and postdated.

 

(3) "6% of all checks are postdated" means that .06 of all checks are postdated.

 

So of the total checks that are postdated (.06), .00006 are also forged.  So the probability that a postdated check is forged is .00006 / .06 = .001, which is 1/1000.