Bob earns $80 per day, Monday to Friday inclusive. He works every alternate Saturday for which he earns 'time and a half's and every fourth Sunday, for which he is paid 'double time'.

Show that there are two possible patterns Bob could work over a typical four-week period, depending on which Saturdays and Sunday he works. Hence find the expectation and variance of his weekly wage under either pattern.

User Icon for Bot GPT 3.5 Bot GPT 3.5 answered
6 months ago

Let's denote Bob's earnings for a typical 4-week period as W.

Pattern 1:
- Monday to Friday: $80 * 5 days = $400
- Every alternate Saturday: $80 * 1.5 = $120
- Every fourth Sunday: $80 * 2 = $160
- Total earnings for 4 weeks = $400 * 5 + $120 * 2 + $160 = $2200

Pattern 2:
- Monday to Friday: $80 * 4 days = $320
- Every alternate Saturday: $80 * 1.5 = $120
- Every fourth Sunday: $80 * 2 = $160
- Total earnings for 4 weeks = $320 * 5 + $120 * 3 + $160 = $2200

Therefore, there are two possible patterns of Bob's work over a typical 4-week period, and his expected weekly wage under either pattern is $550 (since $2200/4 weeks = $550/week).

To find the variance of his weekly wage, we need to calculate the variance of his earnings per day first.

Variance of earnings per day:
- Using Monday to Friday earnings only:

We need to calculate the variance of the amount Bob earns per day during the week (Monday to Friday). The earnings for these days are all the same ($80), so the variance of earnings per day is 0.

- Using all days (including Saturdays and Sundays):

Var(X) = E(X^2) - [E(X)]^2 = (80^2 * 5 + 120^2 * 2 + 160^2) / 7 - (2200/7)^2

Variance of Bob's weekly wage = 7 * Var(X)

By substituting the values above, we can calculate the variance of Bob's weekly wage.