Enter the maximum cost ($) and the probability of cost (%) into the Expected Cost Calculator. The calculator will evaluate and display the Expected Cost.

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## Expected Cost Formula

The following formula is used to calculate the Expected Cost.

EC = MC * P(x)/100

- Where EC is the Expected Cost ($)
- MC is the maximum cost ($)
- P(x) is the probability of cost (%)

To calculate the expected cost multiply the maximum cost by the probability of the cost.

## How to Calculate Expected Cost?

The following example problems outline how to calculate Expected Cost.

Example Problem #1:

- First, determine the maximum cost ($). The maximum cost ($) is given as 5,000.
- Next, determine the probability of cost (%). The probability of cost (%) is provided as 70.
- Finally, calculate the Expected Cost using the equation above:

EC = MC * P(x)/100

The values given above are inserted into the equation below:

EC = 5000 * .70 = 2500 ($)

Example Problem #2:** **

The variables needed for this problem are provided below:

maximum cost ($) = 8,000

probability of cost (%) = 25

Entering these values and solving gives:

EC = MC * P(x)/100 = 2000 ($)