You have chosen biology as your college major because you would like to be a med

Question

You have chosen biology as your college major because you would like to be a medical doctor. However, you find that the probability of being accepted to medical school is about 14 percent. If you are accepted to medical school, then your starting salary when you graduate will be $321,000 per year. However, if you are not accepted, then you would choose to work in a zoo, where you will earn $33,000 per year. Without considering the additional years you would spend in school if you study medicine or the time value of money.

Whats your expected starting salary?

Explanation / Answer

Answer:

Calculation of Expected salary:

Salary if accepted to medical school = $321000

Probability of being accepted to medical school = 14%

Salary if not accepted to medical school = $33000

Probability of not being accepted to medical school = 100%-14% = 86%

Hence Expected Salary = ($321000*14%) + ($33000*86%) = $73320

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.