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yuknam yuknam
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4 years ago
A small business just leased a new computer and color laser printer for three years. The service contract for the computer offers unlimited repairs for a fee of $100 a year plus a $25 service charge for each repair needed. The company's research suggested that during a given year 86% of these computers needed no repairs, 9% needed to be repaired once, 4% twice, 1% three times, and none required more than three repairs.

The service contract for the printer estimates a mean annual cost of $120 with standard deviation of $30. What is the expected value and standard deviation of the total cost for the service contracts on computer and printer?
Textbook 
Stats: Modeling the World

Stats: Modeling the World


Edition: 4th
Authors:
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#1
4 years ago
E(C + P) = 105 + 120 = $225; Var(C + P) = (13.69)2 + 302 = 1087.42, so SD(C + P) = $32.98
yuknam Author
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#2
4 years ago
Thanks
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