You hear it all the time....Today there is a 60% chance of rain and tomorrow there is a 20% chance of rain.  Most people will interpret that in a variety of ways, but what does it really mean?  According to the National Weather Service, the Probability of Precipitation is calculated by multiplying the forecast coverage of rain by confidence in the forecast. 

So in short, the equation looks like this: chance of rain = coverage x confidence. 

For example, if I am 100% confident that 40% of the region will see rain, the rain chance for that day will be:

100% x 40% = 40%.

Now lets now say I am 70% confident that 40% of the region will see rain on a certain day. 

70% x 40% = 28% (which would round to 30%).   

Keep in mind that rain chances do not consider intensity, duration, or amount of rain that will fall.  There could be a 100% chance of rain, but you only see a little drizzle for roughly one hour.  If everyone in the viewing area saw a little bit of drizzle, even for a short period of time, the 100% chance would verify as an accurate forecast. 

Look at the graphic below.  This is what "hypothetically" would happen in your viewing area consisted of 10 people (all living next to each other) and there was a 20% chance of rain.  Two would get wet (Sara), while the others would be dry (John).  Even if the rain chances are high, say 70%, there is still 30% of the region that would expect to stay dry.  

There is certainly a little more to it, but hopefully this gives you a somewhat better idea of rain chances and what they mean.  This is why it is important to listen to the whole forecast and not just a quick look at the 7 day forecast.