Financial and Practical Applications

4. Probability as Fractions and Percentages

Learning outcomes
  • I can express probabilities as fractions, decimals, and percentages.
  • I can calculate simple probabilities.
  • I can compare the likelihood of different events.
  • I can interpret probability information in real-life situations.
  • I can use probability to make predictions.

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What Is Probability?

Probability is a measure of how likely an event is to happen.

We use probability whenever there is uncertainty about an outcome.

Examples include:

  • whether a coin lands heads or tails
  • which number appears when a die is rolled
  • which color is selected from a bag
  • whether it will rain
  • whether a machine produces a defective item
  • how often a particular result may occur in repeated trials

Probability does not usually tell us exactly what will happen next. Instead, it describes how likely different outcomes are.


The Probability Scale

Probability ranges from:

0 to 1

or:

0% to 100%

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Important points include:

0 = 0% = impossible

1/4 = 0.25 = 25% = unlikely

1/2 = 0.5 = 50% = even chance

3/4 = 0.75 = 75% = likely

1 = 100% = certain

A probability can never be less than 0 or greater than 1.


Probability as a Fraction

When outcomes are equally likely:

Probability = Number of favorable outcomes / Total number of possible outcomes

We often write this as:

P(event) = favorable outcomes / total outcomes

For example, a fair six-sided die has six possible outcomes:

1, 2, 3, 4, 5, 6

The probability of rolling a 4 is:

P(4) = 1/6

There is one favorable outcome out of six possible outcomes.


Probability as a Decimal

A fraction can be converted to a decimal by dividing:

numerator ÷ denominator

For example:

1/4 = 1 ÷ 4 = 0.25

Therefore:

P = 0.25


Probability as a Percentage

To convert a decimal probability into a percentage:

Decimal × 100%

For example:

0.25 × 100% = 25%

Therefore:

1/4 = 0.25 = 25%

All three values describe exactly the same probability.

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Common Probability Equivalents

Fraction Decimal Percentage
0 0 0%
1/10 0.1 10%
1/5 0.2 20%
1/4 0.25 25%
1/2 0.5 50%
3/4 0.75 75%
4/5 0.8 80%
9/10 0.9 90%
1 1 100%

Recognizing these common equivalents makes probability comparisons much easier.


Simple Probability

Suppose a bag contains:

3 red counters

2 blue counters

5 counters altogether

What is the probability of selecting red?

Favorable outcomes:

3

Total outcomes:

5

Therefore:

P(red) = 3/5

Convert to decimal:

3 ÷ 5 = 0.6

Convert to percentage:

0.6 × 100% = 60%

Therefore:

P(red) = 3/5 = 0.6 = 60%

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Probability with a Fair Coin

A fair coin has two possible outcomes:

Heads

Tails

Therefore:

P(heads) = 1/2

and:

P(tails) = 1/2

Convert:

1/2 = 0.5 = 50%

So each outcome has a 50% probability on a single fair toss.

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Probability with a Fair Die

A standard fair die has six possible outcomes:

1, 2, 3, 4, 5, 6

Each individual number has probability:

1/6

What is the probability of rolling an even number?

Even numbers:

2, 4, 6

There are:

3 favorable outcomes

Therefore:

P(even) = 3/6

Simplify:

P(even) = 1/2

So:

P(even) = 0.5 = 50%


Another Die Example

What is the probability of rolling a number greater than 4?

Possible favorable outcomes:

5, 6

Therefore:

P(number > 4) = 2/6

Simplify:

1/3

Decimal:

1 ÷ 3 ≈ 0.333

Percentage:

≈ 33.3%

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Probability with a Spinner

Suppose a spinner has:

8 equal sections

with:

3 red

2 blue

2 green

1 yellow

Probability of red:

3/8

Decimal:

0.375

Percentage:

37.5%

Probability of yellow:

1/8

Decimal:

0.125

Percentage:

12.5%

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Because red occupies more equal sections than yellow, red is more likely to occur.


Equally Likely Outcomes

The simple formula:

P(event) = favorable outcomes / total outcomes

works directly when the individual outcomes are equally likely.

For example, with a fair die, each face has the same probability.

But suppose a spinner contains sections of different sizes.

A large section may be more likely than a small section.

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In that situation, simply counting the number of sections may not correctly determine probability.

The size or probability of each outcome must also be considered.


Favorable Outcomes

A favorable outcome is an outcome that satisfies the event we are interested in.

Suppose a die is rolled.

Event:

Roll a number less than 5

Favorable outcomes:

1, 2, 3, 4

Therefore:

P(number < 5) = 4/6

Simplify:

2/3

This does not mean that 1, 2, 3, and 4 are "good." In probability, favorable simply means that the outcome matches the event being investigated.


Impossible Events

An impossible event has probability:

0

For example, rolling a 9 on a standard six-sided die is impossible.

Therefore:

P(9) = 0

or:

0%


Certain Events

A certain event has probability:

1

For example, rolling a number less than 7 on a standard six-sided die is certain.

Possible outcomes:

1, 2, 3, 4, 5, 6

All six satisfy the condition.

Therefore:

P(number < 7) = 6/6 = 1 = 100%


Likelihood Language

Probability can also be described using words.

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Impossible: probability = 0

Unlikely: probability closer to 0 than 0.5

Even chance: probability = 0.5

Likely: probability closer to 1 than 0.5

Certain: probability = 1

These words describe general levels of likelihood rather than always specifying an exact probability.


Comparing Probabilities

Suppose:

Event A:

P(A) = 1/4

Event B:

P(B) = 0.40

Event C:

P(C) = 35%

Convert them to the same form.

Event A:

1/4 = 25%

Event B:

0.40 = 40%

Event C:

35%

Now the probabilities are:

A = 25%

B = 40%

C = 35%

Putting probabilities in the same form makes them much easier to compare.


Comparing Fractions

Suppose:

P(A) = 2/5

and:

P(B) = 3/8

Convert to decimals:

2/5 = 0.40

3/8 = 0.375

Therefore:

0.40 > 0.375

So event A has the greater probability.


Complementary Events

The complement of an event is the event not happening.

For any event A:

P(A) + P(not A) = 1

or:

100%

Suppose:

P(rain) = 30%

Then:

P(no rain) = 100% − 30%

= 70%

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Complement Example with a Die

What is the probability of not rolling a 6?

Probability of rolling 6:

1/6

Therefore:

P(not 6) = 1 − 1/6

= 5/6

or approximately:

83.3%


Theoretical Probability

Theoretical probability is based on a mathematical model of possible outcomes.

For a fair coin:

P(heads) = 1/2

For a fair six-sided die:

P(6) = 1/6

These probabilities can be calculated before conducting an experiment.


Experimental Probability

Experimental probability is based on actual observations or trials.

The equation is:

Experimental Probability = Number of Times Event Occurs / Total Number of Trials

Suppose a coin is tossed 50 times.

Heads occurs:

27 times

Experimental probability:

27/50

= 0.54

= 54%

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The theoretical probability is 50%, but an experiment does not have to produce exactly 50%.


Why Experimental Results Vary

Random processes naturally produce variation.

A fair coin tossed 10 times might produce:

7 heads and 3 tails

That does not necessarily mean:

P(heads) = 70%

The theoretical probability remains:

50%

for a fair coin.

With a larger number of trials, experimental proportions often become closer to the theoretical probability.

This idea is connected to the law of large numbers.


Relative Frequency

Experimental probability is also called relative frequency.

Suppose a basketball player takes:

80 free throws

and makes:

60

Relative frequency of success:

60/80

= 3/4

= 0.75

= 75%

This information can be used to describe past performance and may help estimate future outcomes, while recognizing that future results are uncertain.


Using Probability to Make Predictions

Probability can help estimate how many times an event may occur over many trials.

Suppose:

P(red) = 0.30

and a random selection experiment is performed:

200 times

Expected number of red outcomes:

0.30 × 200 = 60

Therefore, we might predict:

about 60 red outcomes

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4

This is a prediction, not a guarantee.


Expected Frequency

The expected number of times an event occurs can be calculated using:

Expected Frequency = Probability × Number of Trials

For example:

Probability of success:

0.4

Number of trials:

150

Expected frequency:

0.4 × 150 = 60

We would expect approximately:

60 successes

over many similar trials.


Prediction with Fractions

Suppose:

P(blue) = 3/5

and there will be:

100 selections

Expected blue outcomes:

3/5 × 100

= 60

Prediction:

about 60 blue outcomes


Prediction with Percentages

Suppose a machine historically produces:

2% defective items

If:

5,000 items

are produced under similar conditions, a simple prediction based on that rate is:

2% of 5,000

0.02 × 5000 = 100

So the expected number is:

about 100 defective items

Actual results could be higher or lower.


Probability in Weather Information

Weather forecasts often use probabilities.

Suppose a forecast reports:

70% chance of rain

This describes a probability associated with the forecast event and its specified place and time period.

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6

It does not mean that it will rain for exactly 70% of the day.

It also does not guarantee that rain will occur.

A probability describes uncertainty, not certainty.


Probability in Sports

Sports statistics often use past frequencies.

Suppose a player successfully completes:

42 of 60 attempts

Success rate:

42/60

Simplify:

7/10

Decimal:

0.70

Percentage:

70%

If the player makes another 100 attempts under broadly similar conditions, 70 successes might be used as a simple prediction based on the historical rate.

But actual performance can change.

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5

Probability in Games

Games frequently involve probability.

Examples include:

  • dice
  • cards
  • spinners
  • coins
  • random number generators

Suppose a game awards a prize if a player rolls a 6.

Probability of winning:

1/6

Probability of not winning:

5/6

Knowing these probabilities can help us understand how the game is structured.


Probability with Cards

A standard deck contains:

52 cards

There are:

4 suits

with:

13 cards in each suit

Probability of drawing a heart:

13/52

Simplify:

1/4

Therefore:

PHerz = 0.25 = 25%

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5

Another Card Example

There are four aces in a standard 52-card deck.

Therefore:

P(ace) = 4/52

Simplify:

1/13

Decimal:

≈ 0.077

Percentage:

≈ 7.7%


Probability from Tables

Suppose a survey records preferred transportation:

Transportation Students
Walk 24
Bus 36
Car 20
Bicycle 20

Total:

24 + 36 + 20 + 20 = 100

If one student is randomly selected:

P(bus) = 36/100 = 0.36 = 36%

P(bicycle) = 20/100 = 0.20 = 20%

Tables can therefore be used to calculate probabilities from data.


Probability from Graphs

Graphs can also provide information used to estimate probabilities.

Suppose a graph shows:

Red = 40 outcomes

Blue = 30 outcomes

Green = 20 outcomes

Yellow = 10 outcomes

Total:

100 outcomes

Therefore:

P(red) = 40/100 = 40%

P(blue) = 30/100 = 30%

P(green) = 20/100 = 20%

P(yellow) = 10/100 = 10%

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5

Interpreting Probability Data Carefully

Suppose:

20 people are surveyed.

16 choose option A.

Experimental proportion:

16/20 = 80%

It would be correct to say:

80% of the surveyed group chose A.

It would require additional assumptions to claim that exactly 80% of a much larger population would choose A.

The size and selection of the sample matter when probability and statistics are used to make predictions.


Probability Does Not Guarantee Individual Outcomes

Suppose:

P(win) = 90%

This means winning is very likely under the stated model.

It does not mean winning is certain.

A 10% probability of not winning still exists.

Similarly:

P(event) = 1%

does not mean the event is impossible.

Low probability and impossibility are different ideas.


Random Does Not Mean "Equal"

A process can be random without every outcome having the same probability.

For example, imagine a spinner where:

70% of the area is blue

and:

30% is red.

The result may still be random, but:

P(blue) = 0.70

and:

P(red) = 0.30

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Independent Repeated Events

Suppose a fair coin has landed heads five times in a row.

If each toss is independent, the probability of heads on the next toss is still:

1/2

The coin does not "owe" us a tail.

Previous independent results do not change the probability of the next toss.

This common misunderstanding is sometimes called the gambler's fallacy.


Probability and Risk

Probability is often used to describe risk.

For example, suppose two hypothetical events have probabilities:

Event A:

2%

Event B:

20%

Event B is ten times as likely under the stated model:

20% ÷ 2% = 10

However, probability is only one part of evaluating risk. The consequences of an event may also matter.


Worked Example 1: Colored Counters

A bag contains:

4 red

5 blue

1 yellow

Total:

10

Probability of blue:

5/10 = 1/2

Decimal:

0.5

Percentage:

50%


Worked Example 2: Die

What is the probability of rolling a number greater than 2?

Favorable outcomes:

3, 4, 5, 6

Therefore:

P(>2) = 4/6

Simplify:

2/3

Decimal:

≈ 0.667

Percentage:

≈ 66.7%


Worked Example 3: Spinner

A spinner has 20 equal sections.

Eight are green.

Probability:

8/20

Simplify:

2/5

Decimal:

0.4

Percentage:

40%


Worked Example 4: Compare Probabilities

Event A:

3/4

Event B:

0.70

Event C:

72%

Convert:

A = 75%

B = 70%

C = 72%

So their probabilities are:

75%, 70%, and 72%

Converting to a common representation makes the comparison clear.


Worked Example 5: Complement

Probability of success:

0.65

Probability of failure:

1 − 0.65 = 0.35

Therefore:

P(failure) = 35%


Worked Example 6: Experimental Probability

A spinner is used:

200 times

Blue occurs:

46 times

Experimental probability:

46/200

= 0.23

= 23%


Worked Example 7: Prediction

Suppose:

P(success) = 35%

There will be:

400 trials

Expected successes:

0.35 × 400 = 140

Prediction:

about 140 successes


Worked Example 8: Using Historical Data

A sports player succeeds:

72 times in 90 attempts

Experimental probability:

72/90

= 0.8

= 80%

If the player makes another 50 attempts under similar conditions:

Expected successes:

0.80 × 50 = 40

A simple prediction is:

about 40 successes

This remains an estimate rather than a guarantee.


Worked Example 9: Probability from a Table

A survey gives:

Choice Frequency
A 45
B 30
C 15
D 10

Total:

100

If one response is randomly selected:

P(A) = 45%

P(B) = 30%

P(C) = 15%

P(D) = 10%


Worked Example 10: Multi-Step Probability

A bag contains:

6 red

3 blue

1 green

Total:

10

Probability of selecting something that is not red:

Blue or green outcomes:

3 + 1 = 4

Therefore:

P(not red) = 4/10

= 2/5

= 0.4

= 40%

We could also use the complement:

P(red) = 6/10 = 60%

Therefore:

P(not red) = 100% − 60% = 40%


Making Predictions from Probability

Probability-based predictions are most useful over many trials.

Suppose:

P(A) = 0.25

For 20 trials:

Expected frequency:

0.25 × 20 = 5

For 100 trials:

0.25 × 100 = 25

For 1,000 trials:

0.25 × 1000 = 250

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5

The actual results may differ from these numbers, especially for smaller numbers of trials.


A Reliable Probability Strategy

Step 1: Identify the event.

What exactly are you trying to find?

Step 2: Identify all possible outcomes.

Step 3: Determine whether the outcomes are equally likely.

Step 4: Count the favorable outcomes.

Step 5: Calculate:

P(event) = favorable outcomes / total outcomes

Step 6: Simplify the fraction if possible.

Step 7: Convert to a decimal or percentage if required.

Step 8: Check that the probability is between 0 and 1.

Step 9: Interpret what the probability means in context.

Step 10: If making a prediction, remember that expected results are not guaranteed results.


Common Mistakes

Mistake 1: Writing a probability greater than 1

For example:

P(A) = 1.4

cannot be a valid probability.


Mistake 2: Forgetting the total number of outcomes

If a bag contains 3 red and 7 blue counters:

P(red) = 3/10

not:

3/7


Mistake 3: Confusing percentages and decimals

25% = 0.25

not:

25


Mistake 4: Assuming all outcomes are equally likely

This is only valid when the model supports that assumption.


Mistake 5: Treating a prediction as a guarantee

A predicted 60 successes does not mean exactly 60 must occur.


Mistake 6: Treating unlikely as impossible

A probability of 1% is small, but it is not zero.


Mistake 7: Treating likely as certain

A probability of 90% is high, but it is not 100%.


Mistake 8: Assuming short experiments must match theoretical probability

Ten fair coin tosses do not have to produce exactly five heads.


Mistake 9: Assuming previous independent results control the next result

Five heads in a row do not make tails "due" on the next independent toss.


Did You Know?

Probability connects many areas of mathematics and real-world decision-making.

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5

Probability is used in:

  • weather forecasting
  • science
  • genetics
  • medicine and public health research
  • engineering
  • manufacturing
  • sports statistics
  • insurance
  • economics
  • quality control
  • computer science
  • games

In each case, probability helps describe uncertainty.


Key Terms

  • Probability: Measure of how likely an event is.
  • Outcome: One possible result.
  • Event: One outcome or a collection of outcomes being investigated.
  • Favorable outcome: Outcome that satisfies the event being studied.
  • Equally likely: Outcomes having the same probability.
  • Impossible event: Event with probability 0.
  • Certain event: Event with probability 1.
  • Likelihood: How probable an event is.
  • Complement: Event consisting of an event not occurring.
  • Theoretical probability: Probability calculated from a mathematical model.
  • Experimental probability: Probability estimated from observed results.
  • Relative frequency: Proportion of trials in which an event occurs.
  • Trial: One performance of a probability experiment.
  • Expected frequency: Predicted number of occurrences based on probability.
  • Random: Involving uncertainty in individual outcomes.
  • Independent events: Events where the outcome of one does not affect the probability of another.
  • Prediction: Estimate of future results based on available information.

Key Equations and Rules

Simple probability for equally likely outcomes:

P(event) = Favorable Outcomes / Total Possible Outcomes

Experimental probability:

P(event) = Number of Times Event Occurs / Total Number of Trials

Complement rule:

P(A) + P(not A) = 1

Therefore:

P(not A) = 1 − P(A)

Expected frequency:

Expected Frequency = Probability × Number of Trials

Fraction to decimal:

Numerator ÷ Denominator

Decimal to percentage:

Decimal × 100%

Percentage to decimal:

Percentage ÷ 100


Key Takeaways

  • Probability measures how likely an event is to occur.
  • Probabilities range from 0 to 1, or from 0% to 100%.
  • A probability of 0 represents an impossible event.
  • A probability of 1 represents a certain event.
  • An even chance has probability 1/2 = 0.5 = 50%.
  • Probabilities can be written as fractions, decimals, or percentages.
  • Different forms can represent exactly the same probability.
  • For equally likely outcomes, probability can be calculated using favorable outcomes divided by total possible outcomes.
  • Probabilities are easier to compare when converted to the same form.
  • Complementary probabilities add to 1, or 100%.
  • Theoretical probability comes from a mathematical model.
  • Experimental probability comes from observed data.
  • Experimental results may differ from theoretical probabilities.
  • Larger numbers of trials often produce experimental proportions closer to theoretical probabilities.
  • Expected frequency can be calculated by multiplying probability by the number of trials.
  • Probability can be used to make predictions, but predictions are not guarantees.
  • Random does not necessarily mean that all outcomes are equally likely.
  • Past independent outcomes do not make a particular future outcome "due."
  • Real-world probability information should be interpreted in context, especially when it comes from samples or historical data.
  • Probability is useful because it gives us a mathematical way to describe and reason about uncertainty.