We have:
P(telephone line is busy ) = 0.01
Q(telephone lines are not busy) = 1 - 0.01 = 0.99
N =5
So it is problem of binomial distribution
1) The probability for all lines are busy (which is equivalent to no lines are free) = P(X=0)=5C0p5q0=0.015=10−10
2) The probability for more than 3 lines are busy = P(X=0)+P(X=1)=5C0p5q0+5C1p4q1=(.01)5+5(.01)4(0.991)=10−10+495×10−10=496×10−10=4.96×10−10