hwk2

In a particular town there are two automobile rental agencies that offer different prices for a weekend out-of-state automobile rental. An automobile rental at Express Car Rentals (ECR) costs $195 and includes free unlimited mileage. An automobile rental at Discount Rentals Agency (DRA) costs $130 plus a mileage charge; the first 300 miles are free andeach additional mile costs $0.20 per mile. A market survey indicates that the miles driven by rent-a-car customers for weekend rentals obeys the probability distribution shown in the table below.

hwk2

Miles driven	Probability
200	0.07
300	0.19
400	0.23
500	0.14
600	0.07
700	0.13
800	0.09
900	0.08

hwk2

1. a) Last weekend, Ann rented a car from ECR and Bill rented a car from DRA. They were charged the same amount for their rentals. How many miles did Bill drive?
2. b) What is the probability that a randomly selected rent-a-car customer will find a better price at ECR?
3. c) Carol handles reservations at DRA. A customer calls and says that he would like to rent a car for the weekend. He also says that according to his estimate of the distance he is going to travel, it will be less expensive for him to rent a car from DRA. What is the expected cost that Carol will charge this customer?