Suppose the Average Tread-Life of a Certain Brand of Tire

question 92

Multiple Choice

Suppose the average tread-life of a certain brand of tire is 42,000 miles and that this mileage follows the exponential probability distribution. What is the probability that a randomly selected tire will have a tread-life of more than 40,000 miles?

• A)0.3858
• B)0.3016
• C)0.1546
• D)0.2410

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Definitions:

Loan

A sum of money that is lent and is due to be repaid along with interest.

Interest

The charge for borrowing money, typically expressed as an annual percentage of the principal, or the amount earned on invested funds.

Invested

Funds that have been allocated for a particular purpose, especially in financial instruments like stocks, bonds, or real estate with an expectation of generating a return.

Interest

The cost of borrowing money or the reward for saving, typically represented as a percentage of the principal amount over a specific period.