Question

A radio caller won the grand prize, where the caller gets to

spin a wheel with prizes of $500, $750, $1,250, $21500,
$5,000, $10,000, and $25,000 on a wheel. The probability
the wheel lands on $500 is }, landing on $750 is
crIN
landing on $1,250 is 25,
, landing on $2,500 is 25, landing
on $5,000 is 25, landing on $10,000 is 25, and landing on
$25,000 is
25 •
What is the expected amount of money
the radio caller should win if the caller gets to spin the
wheel once?
O $5,050
O $6,450
O $4,100
O $3,650

Answer 1

Answer: To find the expected amount of money the radio caller should win, you can multiply the prize amount by the probability of winning that prize, and add those products for each prize. The expected value is also known as the mean value.

$500 * 1/8 = $62.50

$750 * 1/8 = $93.75

$1,250 * 1/8 = $156.25

$2,500 * 1/8 = $312.50

$5,000 * 1/8 = $625.00

$10,000 * 1/8 = $1250.00

$25,000 * 1/8 = $3,125.00

Total expected value = $62.50 + $93.75 + $156.25 + $312.50 + $625.00 + $1250.00 + $3,125.00 = $5,050.00

So, the expected amount of money the radio caller should win if the caller gets to spin the wheel once is $5,050.

It's worth to mention that the probability for each prize is the same, but the prizes are not the same so each prize win will be different according to the prize amount.

The expected value doesn't assure that the prize will be won, but it's a good approximation of the prize the caller could win.

Explanation: