Word problem?

Question

A contractor must pay a $40,000 penalty if construction of an expensive home requires more than 16 weeks. He will receive a bonus of $10,000 if the home is completed within 8 weeks. Based on experience with this type of project, the contractor feels there is a 0.2 chance the home will require more than 16 weeks for completion, and there is a 0.3 chance it will be finished within 8 weeks. If the price of the home is $350,000 before any penalty or bonus adjustment, how much can the buyer expect to pay for her new home when it is completed?

Answer 1

average price is
350000-(0.2*40000)+(0.3*10000)
=345,000

Answer 2

0.2 * 40,000=8,000 $ would diminuish the cost 350,000 $ and
0.3 * 10,000=3,000 $ would augment the cost 350,000 $.
You could reckon 350,000 - 8,000 + 3,000 and the result of this should be the most probable expectation to pay.
But the chances to complete (the building) within 8 weeks and the chances to complete after 8 weeks should complement one another to 100%. 0.2+0.3=0.5. That's not 100%, I guess you should first multiply the chances with 2 so that they complement each other to 100%.
The real chances to complete within 8 weeks should be 0.6 and
the real chances to complete after 8 weeks should be 0.4.
0.4 * 40,000=16,000 $ and
0.6 * 10,000=6,000 $ therefore
350,000 $ - 16,000 $ + 6,000 $

Answer 3

TRY NOT TO SWEAT THE SMALL STUFF. THERE'S TOO MUCH OF THAT GOING ON THESE DAYS. OH YEA, GOOD LUCK WITH THE HOME AND KEEP LAUGHING. IT'S BETTER THAN ANY DRUG.

Answer 4

40000:16

10000:8

penalty:
=(.2)(16)
3.2


bonus:
=(.3)(8)
2.4



~>


penalty:
4000:16=x:3.2
16x=128000
x=128000/16
x=8000



bonus:
10000:8=x:2.4
8x=24000
x=24000/8
x=3000






price=350000



=350000-8000(penalty)+3000(bonus)
=342000+3000

=$345000

Answer 5

well right now the market is so bad that i wouldn't spend anything on repairs. in other words, i have no idea