Question

Scholarship A is worth $3000 and costs $10 to apply. Scholarship B is worth $4000 and costs $25 to apply. You have a 5% chance of receiving Scholarship A and a 1% chance of receiving Scholarship B.

(a) What is your expected value for Scholarship A?

$

Answer 1

$140

Explanation:

Answer 2

$140

Explanation:

Given:

P(getting scholarship A)=0.05

P(getting scholarship B)=0.01

E(value of scholarship A)=0.05 ( 3000-10)+ 0.95(-10)

=$140