Hi, I would be enormously grateful, if you could provide me with a solution with a step-by-step explanation of a couple of questions.

Problem 5-20 pts It is the beginning of May and you have been offered the following deal to go on vacation in early August. If you pay now, you can get the diving session for $2500. However, if the weather conditions are bad or you get sick and cannot go under water, you get only $500 refund. There is a 10% probability that you will be sick and 35% probability that the weather will be bad. If you wait until the last minute and go only if you are healthy and weather is good, the diving session will cost you $3500. Your pleasure you get from diving is worth $5000 for you (hence you would never pay more to go diving). If the interest rate is 5% per year, would you book the session now or wait? a) Draw you decision tree b) Make a decision