Probability : Expected Value ( Expectation) At a special clothing sale at the Cr

Question

Probability : Expected Value ( Expectation)
At a special clothing sale at the Crescent Oaks Country Club, after the cashier rings up your purchase, you select a slip of paper from a box. The slip of paper indicates the dollar amount, either $5.00 or $10.00 that is deducted from your purchase price. The probability of selecting a slip indicating $5.00 is 7/10 %, and the probability of selecting a slip indicating $10.00 is 3/10 %. If your original purchase before you select the slip of paper is $200.00 determine:
(a) The expected dollar amount to be deducted from your purchase?
(b) The expected dollar amount you will pay for your purchase?

Explanation / Answer

For E(X) just simply go: 5(.7) + 10(.3) = 6.5 So now 200 - 6.5 = 193.5

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