Importance and Application of probability:

Importance of probability theory  is in all those areas where event are not  certain to take place as same  as starting with games of chances. Probability has become  one of the basis  tools  of statistics. Statistics and probability are much  interrelated with  each  other  that it is  difficult to discuss statistics  without  understanding the meaning of probability. A   knowledge of probability theory  makes  it easier, simpler  and possible to interpret the statistical  result, as many of the  statistical procedures include involve conclusions based on samples which are randomly choosen.

Probability theory is being applied not only in mathematical problems but also for the solutions  of  social  economical, political and business  problems. The insurance  insustry emerged in the 19^th century, required exact or definite knowledge about  the  risk of loss inorder to calculate premium. Within  few decades the concept of probability  has assumed  great importance and the mathematical theory  of probability has become the basis of statistical  application  and  social  and decision making. In fact  probability has become a part of everyone life. In  personal and management decisions one faces uncertainty and  uses  probability theory. By organising information  and considering  it systematically, one will be  able to recognise  his or her assumptions, communicate his or reasoning to others and make a better decision than he  or she could by using a shot in the dark approach. Probability theory in fact is the foundation of statistical conclusion or inference.