Question 732007: The owner of an antique store estimates that there is a 40% chance she will make $2000 when she sells an antique china cabinet, a 50% chance she will make $750 when she sells the cabinet, and 10% chance she will break even when she sells the cabinet. Determine the expected amount she will make when she sells the cabinet.
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! The owner of an antique store estimates that there is a 40% chance she will make $2000 when she sells an antique china cabinet, a 50% chance she will make $750 when she sells the cabinet, and 10% chance she will break even when she sells the cabinet. Determine the expected amount she will make when she sells the cabinet.
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E(x) = 0.4*2000+0.5*750+0.1*0 = 80 + 37.5 = $117.50
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Cheers,
Stan H.
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