A contractor must pay a $40,000 penalty if construction of an expense home requires more than 16 weeks. He will receive a bonus of $10,000 if the home is completed within 8 weeks. Based on experience with this type of project, the contractor feels there is a 0.2 chance the home will require more than 16 weeks for completion, and there is a 0.3 chance it will be finished within 8 weeks. If the price of the home is $350,000 before any penalty or bonus adjustment, how much can the buyer expect to pay for her new home when it is completed?

Buyer has 50% chance of paying $350,000, 20% chance of paying %310,000 and 30% chance of paying $360,000.

That is all the information I can give you from the data provided.

I hope it helps. Thanks for asking.

By the way, you School Subject should be Math or Statistics rather than college.

To determine how much the buyer can expect to pay for the new home when it is completed, we need to consider the penalty and bonus adjustments based on the completion time.

Let's calculate the potential penalty and bonus amounts:

1. Penalty: The contractor must pay a $40,000 penalty if construction takes more than 16 weeks. Since the contractor feels there is a 0.2 chance of this happening, we can multiply the penalty amount by the probability: $40,000 * 0.2 = $8,000.

2. Bonus: The contractor will receive a $10,000 bonus if the construction is completed within 8 weeks. Since the contractor feels there is a 0.3 chance of this happening, we can multiply the bonus amount by the probability: $10,000 * 0.3 = $3,000.

Now, let's calculate the adjusted price of the home:

Adjusted price = Price of the home + Penalty - Bonus

Price of the home = $350,000
Penalty = $8,000
Bonus = $3,000

Adjusted price = $350,000 + $8,000 - $3,000 = $355,000

Therefore, the buyer can expect to pay $355,000 for her new home when it is completed.