Question

A cash prize of $3800 is to be awarded at a fundraiser. If 1900 tickets are sold at $4 each, find the expected value. Round your answer to the nearest cent

The expected value is dollars.

Answer 1

The total amount of money collected from selling tickets is: 1900 tickets × $4/ticket = $7,600 Since the cash prize is $3,800, the expected value can be calculated as follows: Expected value = (Probability of winning) × (Cash prize) + (Probability of losing) × (Cost of ticket) The probability of winning is 1 out of 1900 tickets sold, or 1/1900. The probability of losing is 1899/1900. So, the expected value is: (1/1900) × $3,800 + (1899/1900) × $4 = $1.999 Rounding to the nearest cent, the expected value is $2.00.