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Raaj works at the customer service call center of a major credit card bank. Cardholders call for a variety of reasons, but regardless of their reason for calling, if they hold a platinum card, Raaj is instructed to offer them a double-miles promotion. About 10% of all cardholders hold platinum cards, and about 50% of those will take the double-miles promotion. On average, how many calls will Raaj have to take before finding the first cardholder to take the doublemiles promotion?

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For the number of calls before finding the first cardholder to take the double-miles promotion: The probability of success is;

P=(10%)(50%)=(0.10)(0.50)=0.05\begin{aligned} P &= (10\%)(50\%) \\ &= (0.10)(0.50) \\ &= 0.05 \\ \end{aligned}

For the expected value;

E(X)=μ=1p=10.05=20 calls\begin{aligned} E(X) &= \mu = \dfrac{1}{p} \\ &= \dfrac{1}{0.05} \\ &= \boxed{20 \text{ calls}} \end{aligned}

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