SOLUTION: i can not figure this one out. can someone just tell me how to calculate.7 of 20,000. i get 14000 and that would only leave 6,000 which isnt an option. help please!!! A contract

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Question 210376: i can not figure this one out. can someone just tell me how to calculate.7 of 20,000. i get 14000 and that would only leave 6,000 which isnt an option. help please!!!
A contractor is considering a sale that promises a profit of $ 20,000 with a probability of .7 or a loss (due to bad weather, strikes, and such) of $ 3000 with a probability of .3. What is the expected profit?

A)

$ 16,100

B)

$ 17,000

C)

$ 13,100

D)

$ 14,000

Found 2 solutions by vleith, tutor_paul:
Answer by vleith(2983) (Show Source):
You can put this solution on YOUR website!
I think the question here is what does the contractor expect when a large enough set of similar deals happens.
You are told that contractor expects to make 20,000 70% of the time and lose 3000 30% of the time.
So what can the contractor expect if he/she does a bunch of these deals?

Answer by tutor_paul(519) (Show Source):
You can put this solution on YOUR website!
For a given year, calculate the expected profit as follows:

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Good Luck,
tutor_paul@yahoo.com