> Isn't it worth it to purchase the Applecare warranty for $250 which extends the warranty period to 3 years? payoff * Probability of payoff = EV 3000 * Proba

> Isn't it worth it to purchase the Applecare warranty for $250 which extends the warranty period to 3 years? payoff * Probability of payoff = EV 3000 * Probability of payoff = 250 3000 * P / 250 = 250/250 3000 / 250 * P = 1 12 * P = 1 ∴ P = 1 / 12 You require 8.3% of the computers to fail in years 2 and 3, and for the failure to cause $3000 worth of 'damage' avoidance, and for it to be something covered under the warranty terms, for your gamble to make sense. Judging by the fact they offer the warranty, I would imagine the fail rate to be somewhat lower than this, or for the failures to be vastly less expensive than that - else they'd be losing money.