Question

Tax returns filed manually have a 20% chance of containing errors, while tax returns filed electronically have a 0.05% chance of containing the same. If 2.7 million tax returns are filed each way, how many more erroneous manually filed returns will there be than erroneous electronically filed returns?
a.
270,675

Answer 1

Manual errors: 20% of 2,700,000 = 0.20 × 2,700,000 = 540,000.
Electronic errors: 0.05% of 2,700,000 = 0.0005 × 2,700,000 = 1,350.
Difference: 540,000 − 1,350 = 538,650.

So there will be 538,650 more erroneous manually filed returns (option a is incorrect).