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Anettt [7]
3 years ago
8

The probability distribution gives the potential cost of routine maintenance and major repairs in the first 5 years you own a ca

r.Cost over 5 years0$500$1,000$1,500$2,000Probability of cost incurred0.190.670.090.040.01What is the expected cost of routine maintenance and major repairs for the 1st 5 years you own the car? (Recall: the expected value is the mean.)A. 505B. 5000C. 101D. 1000
Mathematics
1 answer:
Arlecino [84]3 years ago
8 0

Answer:

A. 505

Step-by-step explanation:

\begin{array}{cc}cost&probability\\\$0&0.19\\\$500&0.67\\\$1,000&0.09\\\$1,500&0.04\\\$2,000&0.01\end{array}

The expected cost is given by the sum of each possible outcome's value multiplied by its probability:

EC = $0*0.19+ \$500*0.67+ \$1,000*0.09+ \$1,500*0.04+ \$2,000*0.01 \\EC=\$505

The expected cost of routine maintenance and major repairs for the 1st 5 years you own the car is $505.

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