Question

For a fundraiser, there is a raffle with 200 tickets. One ticket will win a $470 prize, and the other tickets will win nothing. If you have a ticket, what is the expected payoff?

Answer 1

There are 200 raffle tickets, so the probability of winning is

`(1)/(200)`

The probability of losing is, therefore,

`(199)/(200)`

The gain when winning is

`470\text{ dollars}`

The loss is

`0\text{ dollars}`

The Expected payoff is, therefore,

`\begin{gathered} (1)/(200)(470)+(199)/(200)(0)= \\ (470)/(200)\text{ + 0} \\ 2.35\text{ Dollars} \end{gathered}`