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Question

According to insurance records a car with a certain protection system will be recovered 86% of the time. If 500 cars are randomly selected, what is the mean and standard deviation of the number of cars recovered after being stolen?

Answer 1

Mean = n × p ;

Standard Deviation (σ) = √(np(1-p)), where ;

1. n is the number in question and
2. p is probability of "success", which in our case is recovery rate

Therefore:

1. Mean = 500 × 0.86
2. Mean = 430

1. Standard deviation (σ) = √(500 × 0.86 × (1 - 0.86) )
2. σ = 7.759