Question

7 singles, 12 fives, 5 twenties, and 2 hundred dollar bills are all placed in a hat. If a player is to reach into the hat and randomly choose one bill, what is the fair price to play this game?

Answer 1

Okay, here we have this:

Considering the provided information we obtain the following:

7 singles P(1)=7/26

12 fives P(5)=12/26

5 twenties P(20)=5/26

2 hundreds P(100)=2/26

E(X)=1*7/26+5*12/26+20*5/26+100*2/26

E(X)≈14.115

Finally we obtain that the approximately fair price is $14.115.