Question

A raffle has a grand prize of a Alaskan cruise valued at $7500 with a second prize of a Rocky Point vacation valued at $1100. If each ticket costs $3 and 12000 tickets are sold, what are the expected winnings far a ticket buyer? Express to at least three decimal place accuracy in dollar form (as opposed to cents).

Answer 1

-$2.28

Explanation:

Given,

Total tickets = 12000,

The number of tickets in which price get = 2 ( one is $7500 and other is $ 1100 ),

Remaining tickets = 12000 - 2 = 11998,

Since, the price of each ticket = $ 3,

Thus, the value of ticket in which $ 7500 get = 7500 - 3 = $ 7497,

While, the value of ticket in which $ 1100 get = 1100 - 3 = $ 1097,

And, the value of remaining tickets = -$ 3,

( Negative sign shows the loss )

Now,

`\text{Probability}=\frac{\text{Favourable outcomes}}{\text{Total outcomes}}`

Hence, the expected winnings far a ticket buyer,

= Probability of the trial × value of the trial

`=(1)/(12000)* 7497 + (1)/(12000)* 1097-(11998)/(12000)* 3`

= -2.2833333

≈ -$2.28