SOA Exam P Question 37 | Expected Value of Exponential Distribution
The lifetime of a printer costing 200 is exponentially distributed with mean 2
years. The manufacturer agrees to pay a full refund to a buyer if the printer fails during
the first year following its purchase, a one-half refund if it fails during the second year,
and no refund for failure after the second year.
Calculate the expected total amount of refunds from the sale of 100 printers.
(A) 6,321
(B) 7,358
(C) 7,869
(D) 10,256
(E) 12,642
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