Homework Clinic
Mathematics Clinic => Statistics => Topic started by: corkyiscool3328 on Aug 31, 2019
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A cell phone company offers a simple extended warranty plan. If your phone is damaged, they will repair it for up to $50. If you lose or destroy your phone, they will give you a $200 voucher towards a new phone. The company believes that 5% of customers will need the replacement voucher and 10% will request a repair.
What is the standard deviation of their profit?
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Var(P) = (25 - 6.25)2 (0.85) + (-50 - 6.25)2 (0.10) + (-200 - 6.25)2 (0.05)
Var(P) = $2742.56
SD(P) = $52.37
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Thank you