Question

A real estate agent spends $1,500 on advertising for three months to sell an average house. If the house sells in three months, the agent earns $9,000. Otherwise, he loses the listing and earns nothing. If there is a 40% chance that the house will sell in three months, what is the expected revenue for the real estate agent?

$2,000
$2,100
$3,200
$3,600

Answer 1

B edge

Explanation:

Answer 2

Ok so if the agent spend 1,500$ on advertising then thats -1,500 for his wallet eg.

WALLET:

-1,500$

Now if the house sells in 3 months that's 9,000 in wallet but since there is only a 40% chance then we need to work out 40% of 9000 we can do that by doing 9000 x 0.40 which = 3,600 so 3,600 in wallet on average

-1,500

+3,600

now if we combine these we get 2,100 so the answer is on average 2,100