PROBABILITY IN EVERY DAY LIFE By: Carla Norman, Erin Densmore,

Dena E.

WHAT IS PROBABILITY? Probability is the measure of how likely

an event is Probability is found all around us.

WINNING THE LOTTERY If there is data for 100 days with similar

weather conditions (the sample space), and on 70 of these days it rained (a favorable outcome), the probability of rain on the next similar day is 70/100 or 70%

A 50% probability means that an event is just as likely to happen as not to happen, a 70% chance means that it is more likely to rain than not

INSURANCE PREMIUMS Car insurance companies look at your

age and driving record when deciding your premium rate.

If they see you've had several accidents, the likelihood is that you might have another one. In that case, your rates will be higher than a safe driver's.

BATTING AVERAGE For baseball stats, all the percentages

are multiplied by 10, so a 30% probability translates to a 300 batting average

Example: If your favorite baseball player is batting 300. This means that when he or she goes up to the plate, they only have a 30% chance of hitting the ball!

BATTING AVERAGE A batting average involves calculating

the probability of a player hitting the ball.

The sample space is the total number of time a player has had at bat and each hit is a favorable outcome. Therefore, in 10 at-bats a player gets 3 hits, his or her batting average is 3/10 or 30%.

GAMBLING Counting Cards Way for players to keep track of cards

that have been dealt, giving them an idea about which cards are still left in the deck.

Blackjack is one of few casino games where card counting can be useful because probabilities change as cards are dealt and the player can see many of the cards that are dealt.

GAMES Wheel of Fortune Lets Make a Deal Let it Roll Who Wants to be a Millionaire Texas Hold ‘Em Poker

ENVIRONMENTAL REGULATION Example: is the effect of the perceived

probability of any widespread Middle East conflict on oil prices—which have ripple effects in the economy as a whole.

An assessment by a commodity trader that a war is more likely vs. less likely sends prices up or down, and signals other traders of that opinion

The probabilities are neither assessed independently nor necessarily very rationally

CONSUMER PRODUCTS Many consumer products, such as

automobiles and consumer electronics, use reliability theory in product design to reduce the probability of failure

Failure probability may influence a manufacture's decisions on a product's warranty and recall