Question

1. Darryl is a welder living in San Francisco.  He can either work repairing residential gutters or the Golden Gate Bridge.  If he works on gutters he will make $40,000 per year and there is no chance he will die on the job.  If he works on the Golden Gate Bridge he will make $60,000 per year, but there is 1/100 chance that he will die in any single year (assume that even if Darryl dies on the job that he earns his full salary before dying).  If Darryl takes the job on the bridge, what is the expected value of his life? (5)

Answer 1

Darryl either repairs the residential gutters or golden gat bridge.

so the probability he will repair residential gutters is = 0.5 and will make money is = $40000 (there is no chance he will die on this job)

or

the probability that he will repair golden gate bridge = 0.5 and will make money is = $ 60000 ( there is 1/100 chance that he will die in any single day)

so the probability that the Darryl takes the job on the bridge then expected value of his life = 0.5*1/100

= 0.005