The daily earnings X of an employee who works on a commission basis are given by the following probability distribution. Find the employee's expected earnings.
A) E(
X) = 71.75
B) E(
X) = 79.50
C) E(
X) = 73.50
D) E(
X) = 77.25

Question

The daily earnings X of an employee who works on a commission basis are given by the following probability distribution. Find the employee's expected earnings. 
A) E(
X) = 71.75 
B) E(
X) = 79.50 
C) E(
X) = 73.50 
D) E(
X) = 77.25

Quizplus · Accepted Answer

To find the expected earnings, we multiply each possible earning by its corresponding probability and sum them up.

$$E(X) = (50)(0.05) + (60)(0.10) + (70)(0.20) + (80)(0.30) + (90)(0.25) + (100)(0.10) = 77.25$$

Therefore, the best answer choice is D, with an expected earning of $77.25.

The Daily Earnings X of an Employee Who Works on a Commission