Question

The student council is hosting a drawing to raise money for scholarships. They are selling tickets for $10 each and will sell 800 tickets. There is one $3,000 grand prize, two $200 second prizes, and fifteen $20 third prizes. You just bought a ticket. Find the expected value for your profit. Round to the nearest cent.

Answer 1

Answer: -$5.375

Step-by-step explanation:

Given that,

Selling tickets = $10 each and sell 800 tickets

• one $3,000 - grand prize
• Two $200 - second prizes
• Fifteen $20 - third prizes

`E(x) = (1)/(800)*3,000 + (2)/(800)*200 + (15)/(800)*20 + (800-1-2-15)/(800)*0 - 10`

= 3.75 + 0.5 + 0.375 + 0 - 10

= -$5.375

Therefore, expected value for your profit is -$5.375