You need a loan of $150,000. Compare your monthly payments and total loan cost under two options. Assume that the closing costs
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Answer:
The expected number of times is 4.
Step-by-step explanation:
Looking at the question, we see that this follows a geometric distribution because it is asking for the expected number of trials hat will bring about the FIRST SUCCESS. The probability of success is
Since it is a geometric distribution, we know that the expected value of a random variable X, E(X) that follows a geometric distribution is given as:
E(X) = 1/p where p is the probability of success.
Therefore, the expected number of times will be
E(X) = 1/(1/p) = 1/(1/4) = 4.
Hence, the expected number of times is 4.