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Math Help - Expected value question from a "Survey of Math" course

  1. #1
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    Expected value question from a "Survey of Math" course

    Hi,

    I hope this post is in the right place!!

    I have the following question and am trying to understand it properly. Please advise and thanks to all for your assistance.


    A store that sells and repairs televisions sells maintenance agreements for $13 a year. The average cost for
    repairing a television is $55 and 7 in every 100 people who purchase maintenance agreements have televisions

    that need repair. Find the expected profit per maintenance agreement.

    Bob
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  2. #2
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    Re: Expected value question from a "Survey of Math" course

    Hello, bobries1959!

    Be careful!
    This is not your average Expected Value problem.


    A store that sells and repairs televisions sells maintenance agreements for $13 a year.
    The average cost for repairing a television is $55.
    7 in every 100 people who purchase maintenance agreements have televisions that need repair.
    Find the expected profit per maintenance agreement.

    The store receives $13 for every agreement.
    It costs the store $55 for 7% of the agreements.

    The expected profit is:
    . . (100\%)(\$13) + (7\%)(\text{-}\$55) \:=\:\$9.15\text{ per agreement.}
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  3. #3
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    Re: Expected value question from a "Survey of Math" course

    Soroban,

    Thank you so much for the help!! I could not understand the process there. Thank you again for your assistance!

    Bob
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