From January 1 to March 31 (3 months), a registration bug affects Premium users. A Premium user must be registered to be recognized for a 2% commission; unregistered users are treated as 1% commission; the $1.25/month admin cost applies only when registered. Due to the bug: (i) Premium users who cancel remain registered, and (ii) new Premium users are not registered. Each month, 400 Premium users cancel and 2,000 new Premium users join. Assume average spending: Premium $625/month; Regular $500/month. Commission is company revenue; admin is a company cost. Cohorts persist until fix on April 1 (e.g., January’s cancelers remain registered for Jan–Mar; February’s for Feb–Mar; etc.). Compute the net profit impact over the 3 months versus correct functioning, itemizing revenue and cost deltas for each cohort and giving the total dollar impact.

This question evaluates a candidate's ability to perform cohort-based financial impact analysis and basic statistical arithmetic to quantify revenue and cost deltas caused by registration-state errors.

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This is a medium difficulty Statistics & Math question, commonly asked during Technical Screen rounds at Capital One.

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This question is commonly asked for Data Scientist candidates at Capital One during technical interviews.

Quantify database bug cost/benefit | Capital One Interview Question

Bug Impact on Commission and Admin Costs (Jan–Mar)

Context and Assumptions

The company earns commission revenue on user spend; an admin fee is a company cost.
Registration determines commission rate and admin cost applicability:
- Registered: 2% commission rate; $1.25/month admin cost (company cost).
- Unregistered: 1% commission rate; $0 admin cost.
Average monthly spend:
- Premium user: $625
- Regular user: $500
During Jan 1–Mar 31, a bug causes:
1. Premium users who cancel remain registered.
2. New Premium users are not registered.
Volumes each month: 400 Premium users cancel; 2,000 new Premium users join.
Cohorts persist as described until a fix on April 1:
- January cancelers remain registered for Jan–Mar (3 months).
- February cancelers: Feb–Mar (2 months).
- March cancelers: Mar (1 month).
- January joiners are unregistered for Jan–Mar (3 months); February joiners for 2 months; March joiners for 1 month.
Upon cancellation, users behave as Regulars ( $500/month spend). New joiners behave as Premiums ($ 625/month spend).

Task

Compute the net profit impact over the three months (Jan–Mar) versus correct functioning, itemizing revenue and cost deltas for each cohort and giving the total dollar impact.

Context and Assumptions

The company earns commission revenue on user spend; an admin fee is a company cost.

Registration determines commission rate and admin cost applicability:

Registered: 2% commission rate; $1.25/month admin cost (company cost).
Unregistered: 1% commission rate; $0 admin cost.

Average monthly spend:

Premium user: $625
Regular user: $500

During Jan 1–Mar 31, a bug causes:

Premium users who cancel remain registered.
New Premium users are not registered.

Volumes each month: 400 Premium users cancel; 2,000 new Premium users join.

Cohorts persist as described until a fix on April 1:

January cancelers remain registered for Jan–Mar (3 months).
February cancelers: Feb–Mar (2 months).
March cancelers: Mar (1 month).
January joiners are unregistered for Jan–Mar (3 months); February joiners for 2 months; March joiners for 1 month.

Upon cancellation, users behave as Regulars (

500/month spend). New joiners behave as Premiums (

625/month spend).

Quantify database bug cost/benefit

Quick Overview

Bug Impact on Commission and Admin Costs (Jan–Mar)

Context and Assumptions

Task

Solution

Comments (0)

Quantify database bug cost/benefit

Quick Overview

Bug Impact on Commission and Admin Costs (Jan–Mar)

Context and Assumptions

Task

Solution

Comments (0)