Question

:)

Answer 1

To solve expected value problems, we multiply x * P(x) , and sum up the terms.

So here the expected value for the maintenance plan coverage is
.01 * 400 + .02 *200 + .10 * 100 = 18
So in the long run you will gain 18 dollars if you use the maintenance plan. So to be fair to the person offering the maintenance plan, it should cost 18 dollars.