Solution Found!
The initial value of an appliance is $700 and its dollar
Chapter 3, Problem 20E(choose chapter or problem)
The initial value of an appliance is $700 and its dollar value in the future is given by
\(v(t)=100\left(2^{3-t}-1\right), \quad 0 \leq t \leq 3\),
where \(t\) is time in years. Thus, after the first three years, the appliance is worth nothing as far as the warranty is concerned. If it fails in the first three years, the warranty pays \(v(t)\). Compute the expected value of the payment on the warranty if \(T\) has an exponential distribution with mean \(5\).
Equation Transcription:
Text Transcription:
X
v(t)=100(2^3-t-1), 0 < or = t < or = 3
t
v(t)
T
5
Questions & Answers
QUESTION:
The initial value of an appliance is $700 and its dollar value in the future is given by
\(v(t)=100\left(2^{3-t}-1\right), \quad 0 \leq t \leq 3\),
where \(t\) is time in years. Thus, after the first three years, the appliance is worth nothing as far as the warranty is concerned. If it fails in the first three years, the warranty pays \(v(t)\). Compute the expected value of the payment on the warranty if \(T\) has an exponential distribution with mean \(5\).
Equation Transcription:
Text Transcription:
X
v(t)=100(2^3-t-1), 0 < or = t < or = 3
t
v(t)
T
5
ANSWER:
Answer:
Step 1 of 1 :
Given that,
The initial value of an appliance is $7,000 and it's the value in future is
Where t is time in years and has an exponential distribution with mean 5.
Our goal is to find