What Is the Probability That a Random Person Who Tests

question 5

Essay

What is the probability that a random person who tests positive for a certain blood disease actually has the disease, if we know that 1% of the population has the disease, that 95% of those who have the disease test positive for it, and 2% of those who do not have the disease test positive for it.

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Definitions:

Retained Earnings

Cumulative net income minus dividends paid to shareholders, representing the portion of profit reinvested in the business.

Depreciation Expense

The distribution of a physical asset's cost across its anticipated lifespan to reflect its depreciation over time.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, also known as the bottom line.

Private Corporation

A company owned by non-governmental organizations or a relatively small number of shareholders or company members which does not offer or trade its company stock (shares) to the general public.