Suppose the probability of an IRS audit is 1.9 percent for U.S. taxpayers who file form 1040 and who earned $100,000 or more.
(a) What are the odds that such a taxpayer will be audited? (Round your answers to the nearest whole number.)
Odds that a taxpayer will be audited ..... to .....
(b) What are the odds against such a taxpayer being audited? (Round your answers to the nearest whole number.)
Odds against a taxpayer being audited ..... to...
Here are the two probabilities this problem is asking you to solve for:
P(odds of being audited) = P(Audit) / 1-P(Audit)
And the second probability is:
P(odds against being audited) = P(not audited) / 1-P(not audited)
Also, we have
P(not audited) = 1P(Audit)
Part-a odds that such a taxpayer will be audited =P(Audit)/[1-P(not... View the full answer