Probability of Loan Request Being Approved: Example Problem
Ann is applying for a bank loan to open a pizza franchise. She must first complete a written application and then, if the written application is approved, be interviewed by bank officers. If an applicant’s written application is not approved the applicant is not granted an interview with the bank officers.
Past records for this bank show that the probability of an applicant having his or her written application approved is 0.63. Records also indicate that the interviewing committee of bank officers approves 85% of the individuals they interview. Find the probability that Ann’s loan request is approved. Round answer to 2 decimal places.