A real estate agent spends $1,500 on advertising for three months to sell an average house. if the house sells in three months, the agent earns $9,000. otherwise, he loses the listing and earns nothing. if there is a 40% chance that the house will sell in three months, what is the expected revenue for the real estate agent?
Answer:
$2100.
Step-by-step explanation:
We have been given that a real estate agent spends $1,500 on advertising for three months to sell an average house. This means that cost of advertisement is $1500.
We are also told that if he house sells in three months, the agent earns $9,000 and there is a 40% chance that he will sell the house in three months.
To find the expected revenue first of all let us find 40% of $9000.
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Now let us subtract the amount spent on advertising from the profit earned by agent to find the expected revenue.
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Therefore, the expected revenue for the real estate agent is $2100, is he sells the house in 3 months.