The Problem: I have 100 individuals that decided to join a cable service in the first month; the first month is free and no payment is required. After the first free month, 70% of the 100 people decided to convert to paid patrons and the rest of people decided to stop their service immediately after the first month. After six months 40% of the 70 individuals that converted to patrons that pay continued to pay and keep the cable service.
Questions I Need to Answer:
What is the probability that individuals will stop the cable service after the first month?
What is the probability of converted patrons that decided to stay after the first month and pay, will stop their cable service between the 2nd month and 6th month, inclusive?
What is the probability that converted patrons will keep their service stay after six months?
I am struggling with calculating the probabilities correctly of the aforementioned probability questions. I believe I calculated the probability of the first question correctly which I think is .30 (leave) * .70 (stay) which equals 21%. The second is tripping me up, but the third question I think the right probability is .60 (leave) * .40 (stay) which is 24%. I am not to strong in figuring out probabilities and therefore would appreciate some help.