Quantify database bug cost/benefit

Quick Overview

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.

Quantify database bug cost/benefit

Company: Capital One

Role: Data Scientist

Category: Statistics & Math

Difficulty: medium

Interview Round: Technical Screen

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.

Quick Answer: 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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Oct 13, 2025, 9:49 PM
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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/monthspend).NewjoinersbehaveasPremiums(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.

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