A bike store offers a two-year warranty on new bikes. The warranty covers two parts, the bike frame and the gear shifter. If either of these parts breaks, the store will replace or repair it at no cost to the customer.
Madeline buys a new bike. She does some research, and determines that the probability that her bike frame will break within two years is represented by the equation P(bike frame breaks) = 0.15. The probability that the gear shifter will break within two years is represented by the equation P(gear shifter breaks) = 0.30. The two-year warranty costs $75. Should Madeline buy the warranty?

Find the expected value of repairing each bike part.

Find the total expected value of the two repair costs.

Compare the expected repair costs to the cost of the warranty and determine whether or not Madeline should get the warranty.

This applet is provided by Walch Education as supplemental material for the UCSS Secondary Math II program. Visit www.walch.com for more information on our resources.