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Justine works for an organization committed to raising money for Alzheimer’s research. From past experience, the organization knows that about 20% of all potential donors will agree to give something if contacted by phone. They also know that of all people donating, about 5% will give $100 or more. On average, how many potential donors will she have to contact until she gets her first$100 donor?

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For the number of contact before finding the first $100 donor: The probability of success is;

P=(20%)(5%)=(0.20)(0.05)=0.01\begin{aligned} P &= (20\%)(5\%) \\ &= (0.20)(0.05) \\ &= 0.01 \\ \end{aligned}

For the expected value;

E(X)=μ=1p=10.01=100 contacts\begin{aligned} E(X) &= \mu = \dfrac{1}{p} \\ &= \dfrac{1}{0.01} \\ &= \boxed{100 \text{ contacts}} \end{aligned}

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