Denon is buying a clothes dryer that costs $825.
The clothes dryer has a 1 yr warranty from the manufacturer.
The store sells a 5 yr extended warranty for $110. (This is gain amount.)
The odds against needing repairs over the 5 yr are 3:17
What is the probability that the dryer will not need repairs? (This is probability of gain.) Express using the method of your choice
To find the probability that the dryer will not need repairs over the 5 year warranty period, we can use the odds against needing repairs.
Odds against needing repairs are given as 3:17. This means that out of every 20 dryers sold, 3 will need repairs and 17 will not.
To find the probability of not needing repairs, we can calculate:
Probability = 17 / (3 + 17) = 17 / 20
Therefore, the probability that the dryer will not need repairs over the 5 year warranty period is 17/20 or 85%.