OG12, Q4, Diag Test

[von]

Hi all, I'm just getting serious with my GMAT studying and have a question about the answer to Q4 in the diag test. I've been looking at the answer to this problem for probably about an hour and I still don't get it:

Among a group of 2,500 people, 35 percent invest in municipal bonds, 18 percent invest in oil stocks, and 7 percent invest in both municipal bonds and oil stocks. If 1 person is to be randomly selected from the 2,500 people, what is the probability that the person selected will be one who invests in municipal bonds but NOT in oil stocks?

Okay, so I started by realizing:

0.35(2500) = 875 = muni
0.18(2500) = 450 = oil
0.07(2500) = 175 = muni+oil

And since probability = num of favorable outcomes/tot num of outcomes and the question asks for the probability that the person selected will be one who ONLY invests in muni's I keep trying to figure out why the problem can't be setup like:

875/2500, okay, wait that = 0.35, ther percent invested in muni's. I'm so confused. How do you do probability? PS: I'm looking at Sal's tutorials on probability at the academy -> https://www.khanacademy.org/video/probability--part-1-

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[kvcpk]

Hi all, I'm just getting serious with my GMAT studying and have a question about the answer to Q4 in the diag test. I've been looking at the answer to this problem for probably about an hour and I still don't get it:

Among a group of 2,500 people, 35 percent invest in municipal bonds, 18 percent invest in oil stocks, and 7 percent invest in both municipal bonds and oil stocks. If 1 person is to be randomly selected from the 2,500 people, what is the probability that the person selected will be one who invests in municipal bonds but NOT in oil stocks?

Okay, so I started by realizing:

0.35(2500) = 875 = muni
0.18(2500) = 450 = oil
0.07(2500) = 175 = muni+oil

And since probability = num of favorable outcomes/tot num of outcomes and the question asks for the probability that the person selected will be one who ONLY invests in muni's I keep trying to figure out why the problem can't be setup like:

875/2500, okay, wait that = 0.35, ther percent invested in muni's. I'm so confused. How do you do probability? PS: I'm looking at Sal's tutorials on probability at the academy -> https://www.khanacademy.org/video/probability--part-1-

[/url]

Hi,

Givent hat 875 invest in municipal bonds.This includes those who invested in both.

We are being asked the number of those who invest ONLY in minucipal bonds.
Hence only Munici = 875-175 = 700

Number of favorable outcomes = 700
total number of outcomes = 2500

Hence probability = 700/2500 = 7/25

Hope this helps!!

[von]

Got it!, that makes sense!

[Prashantbhardwaj]

This question can be calculated just by percentage also.
Total percentage 100%

percent investing in bonds 35%
total investing in both 7%

Total investing in bonds alone 35-7 = 28

Probability = 28/100 or 7/25