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Jason sells medical equipment that is priced at $2 million or more. He has a base...

Jason sells medical equipment that is priced at $2 million or more. He has a base salary of $40,000 per year. If he sells 5 or fewer pieces of medical equipment in a year, he gets no commission. He earns just $40,000. Let M represent the random variable of the number of pieces of medical equipment he sold in a year. When he sells 6 or machines in a year, his total pay is determined by the formula below.
Pay = $40,000 + $30,000 (M-5)2 for M > 6
For example if he sells 7 in one year, Jason is paid $160,000.
The probability distribution of the number of sales is provided in the table below

M 3 4 5 6 7 8
Prob. .1 .20 .30 .20 .15 .05


a) What is the probability that Jason earns more than $100,000 in a year?
b) What are the expected value and the variance of his annual salary?
c) In a year that Jason earned less than $100,000, what is the probability that his actual salary was $40,000?
d) What is the probability that at least one year in five, he earns more than $100,000?
e) What is the probability that in 10-year period he earns more than $800,000?

math   Statistics-And-Probability   
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Answer #1

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