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Scholarship A is worth $3000 and costs $10 to apply. Scholarship B is worth $5000 and costs $25 to apply. You have a 4% chance of receiving Scholarship A and a 2% chance of receiving the Scholarship B.

 

I can't figure out (b) can someone help I thought it was 25 but it's not. 

 

(a) What is your expected value for Scholarship A? 
110

(b) What is your expected value for Scholarship B? 
$  _____________

 

(c) You can only apply for one scholarship. Which one should you choose? 

 

🗸 Scholarship A

 

____ Scholarship B 

 Nov 9, 2018
 #1
avatar+5635 
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\(E[V_B] = 5000 \cdot 0.02 - 25 = 100-25 = $75\)

.
 Nov 9, 2018

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