The following is a disscussion problem in our stats class. It seems

that several students arrived at several different answers for part b.

So I am curious if I have made an error and if so, where.

(note: this is exactly how the problem reads.)

A certain experiment is to be performed until a successful result is obtained. The trials are independent and the probability of success on a single trial is 0.25. The costof performing the experiment is $25,000; however, if a failure results, it costs $5,000

to "set-up" for the next trial.

a) What is the expected cost of the project? ans. $40,000

b) Suppose that the experimenter has a maximum of $500,000, what is the probability that the experimental work would cost more than this amount?

here is what i did:

$500,000 - $25,000 = $475,000 (to spend on failures)

$475,000 / $5,000 = 95 failures

X: number of trials

So, we wish to find P ( X > 95 ) = (1-.25)^96 which is approx. 0.