Question

1. An LG Dishwasher, which costs $800, has a 20% chance of needing to be replaced in the first 2 years of purchase. A two-year extended warrantee costs $112.10 on a dishwasher. What is the expected value of the extended warranty assuming it is replaced in the first 2 years?

2. Approximately 10% of all people are left-handed. Consider a grouping of fifteen (15) people.
a. State the random variable.
b. Write the probability distribution.
c. Draw a histogram.
d. Describe the shape of the histogram.
e. Find the mean.
f. Find the variance.
g. Find the standard deviation.

Answer 1

Explanation:

The expected value of the extended warrant is calculated as follow.

Value of Waranty

= 800 x 20% − 112.10

= 800 x 20/100 − 112.10

= 47.9

The expected value of the extended warranty assuming it is replaced in the first 2 years is given as follow.

Expected value=800-112.10=>687.90

Therefore, required expected value of extended warranty is 687.90

2.

Given information:

Number of Trials (n) = 15

Probability of Success (p) = 0.10

a) Let X represents the number of left-handed people.

b) The probability distribution follows binomial distribution.

X ∼ Binomial distribution

The probability distribution is given as follow.

P(X = x) = ^nCx(p)^x(1 − p)^n − x

c)The histogram is given as follow. (See attachment)

d) The shape of histogram is skewed right.

e) The mean is calculated as follow.

Mean

=n x p

= 15 x 0.10

= 1.5

f) The variance is calculated as follow.

Variance

= n x p x q

= 15 x 0.10 x 0.90

= 1.35

g) The standard deviation is calculated as follow.

Standard deviation

=√n x p x q

=√15 x 0.10 x 0.90

= 1.162