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An appliance store sells additional warranties on its refrigerators.
twenty percent of the buyers buy the limited warranty for $100
and 5% buy the extended warranty for $200.
What is the expected revenue for the store from the warranty if it sells 120 refrigerators?
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20% of 120 buyers = 24 buyers; they buy the limited warranty of $100.
5% of 120 buyers = 6 buyers; they buy the extended warranty of $200.
The problem does not tell it explicitly, but from the context, it is clear that the set of those
who buys the limited warranty and the set of those who buys the extended warranty are disjoint,
i.e. have empty intersection (nobody pays twice).
Therefore, the expected revenue is the sum 24*100 + 6*200 = 3600 dollars. ANSWER
Solved.