Question

The student council is hosting a drawing to raise money for scholarships. They are selling tickets for $6 each and will sell 900 tickets. There is one $1,000 grand prize, four $200 second prizes, and fourteen $20 third prizes. You just bought a ticket. Find the expected value for your profit. Round to the nearest cent.

Answer 1

To find the expected value for your profit, you need to multiply the probability of winning each prize by the amount of money you would receive from each prize. The expected value for your profit is approximately $0.31.

Step-by-step explanation:

To find the expected value for your profit, we need to multiply the probability of winning each prize by the amount of money you would receive from each prize.

The probabilities of winning each prize are:

• Grand prize ($1,000): 1/900
• Second prize ($200): 4/900
• Third prize ($20): 14/900

The expected value for your profit is then calculated by multiplying the probability of each prize by the amount of money you would receive, and summing all the values:

Expected value = (1/900) * $1,000 + (4/900) * $200 + (14/900) * $20

Rounding to the nearest cent, the expected value for your profit is approximately $0.31.