Popular city restaurant and credit cards. 40% of people pay with credit card.
(a) An appropriate model to estimate the probability that, of the next 20 customers of the restaurant, at least 5 will use a credit card.
p(cc payment) = 0.4
n = 20
X = number of cc payments
mean = np = 20 x 0.4 = 8
s = 2.19
We want the area under the curve to the left of 5
The z score is: 5-8/2.19 = -1.369
Z = 0.0853, which equates to 8.5 % probability that out of the next 20 customers, at least 5 will pay by credit card.