The formula for finding errors or defects remaining after the test is as follows;
N-n = n X ( S - s ) / s
Where N is the total number of errors
n is the number found by testing 120
S is the total number of seeded defects 400
s is the number of seeded defects found during testing 240
120 x ( 400 - 240 ) / 240
120 x ( 160) / 240 = 80.