Question

Find the expected value of the winnings

from a game that has the following
payout probability distribution:
Payout ($)
1 2 5 8 10
Probability 0.35 0.2 0.1 0.2 0.15
Expected Value = [? ]
Round to the nearest hundredth.
Enter

Answer 1

4.35

Explanation:

The expected value can be defined as:
`\sum{x_i*p_i}` where x_i = the payout, and p_i = the probability of it occurring.

This gives us the expression:
`(1 * 0.35) + (2 * 0.2) + (5 * 0.1) + (8 * 0.2) + (10 * 0.15) = 0.35 + 0.4 + 0.5 + 1.6 + 1.5 = 4.35`

So the expected payout is 4.35