Question

A service television sells maintenance agreements for $8 a year. The average cost for repairing a television is $35 and 5 in every 100 people who purchase maintenance agreements have needed repair.

Find the service expected profit per maintenance agreement.

Answer 1

$6.25

Explanation:

35 * 5 = 175

(How much money they lose per 100 people)

175/100=1.75

( how much money they lose per person on average)

8

(how much money they gain per person)

8 - 1.75 = 6.25

(Subtract average amount of money spent from profit per person)

The profit is expected to be $6.25 per maintenance agreement