A realtor who takes the listing on a house to be sold knows that she will spend $700 trying to sell the house. If she sells it herself, she will earn 6% of the selling price. If another realtor sells a house from her list, the first realtor will earn only 3% of the price. If the house remains unsold after 6 months, she will lose the listing. Suppose that probabilities are as follows: Event Probability Sells the house alone 0.50 Sells through another agent 0.40 Does not sell in 6 months 0.10 What is the expected profit from listing a $175,000 house?
A realtor who takes the listing on a house to be sold knows that she will spend $700 trying to sell the house. If she sells it herself, she will earn 6% of the selling price. If another realtor sells a house from her list, the first realtor will earn only 3% of the price. If the house remains unsold after 6 months, she will lose the listing. Suppose that probabilities are as follows: Event Probability Sells the house alone 0.50 Sells through another agent 0.40 Does not sell in 6 months 0.10 What is the expected profit from listing a $175,000 house?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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A realtor who takes the listing on a house to be sold knows that she will spend $700 trying to sell the house. If she sells it herself, she will earn 6% of the selling price. If another realtor sells a house from her list, the first realtor will earn only 3% of the price. If the house remains unsold after 6 months, she will lose the listing. Suppose that probabilities are as follows:
| Event | Probability |
| Sells the house alone | 0.50 |
| Sells through another agent | 0.40 |
| Does not sell in 6 months | 0.10 |
What is the expected profit from listing a $175,000 house?
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