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 Sitting on the Fence (Posted on 2013-08-13)
Ann has a choice of two babysitting payment options:
1. She can accept a flat rate of \$15 for a night's work, or:
2. She can choose two of six sealed envelopes containing \$1, \$1, \$5, \$5, \$10 and a \$20 bill.
(For example, the second option could leave Ann with as little as \$2 or as much as \$30 for a night's work.)

Assuming that Ann will have to babysit for a very long period of time, which is the better payment option for her?

 No Solution Yet Submitted by K Sengupta No Rating

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 re: solution, different result | Comment 2 of 5 |
(In reply to solution by Daniel)

While I get the same conclusion (the flat rate is better), I get a different result.

Ann can get the following amounts:

2
6
6
11
21

6
6
11
21

10
15
25

15
25

30

The total of 420\$ made in 14 choices averages on 14\$.

When looking in Daniels sloution, I believe the probability of (5,5) is (2/6)*(1/5) = 2/30.  This would land him too on 420/30 or 14.

 Posted by Hugo on 2013-08-13 12:39:55

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