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Based on its experience, a department store has developed the following table for the transition probabilities for accounts moving during a 1-month period from either

Based on its experience, a department store has developed the following table for the transition probabilities for accounts moving during a 1-month period from either of the two transient categories into one of the four possible categories. Answer all the questions.

Initial Category

Category After 1 Week

Paid

Bad -debt

0- to 30-Day

31- to 90-Day

Paid

1.00

0.00

0.00

0.00

Bad-debt

0.00

1.00

0.00

0.00

0- to 30-Day

0.55

0.00

0.10

0.35

31- to 90-Day

0.65

0.11

0.20

0.04

  1. What percentage of the accounts in the two transient categories will eventually be paid, and what percentage will end up as bad debts?
  2. If the amounts in the two transient categories at the beginning of June are Php2,150,000 and Php3,690,000, what amounts will eventually be paid?

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