Question

There is a raffle for a $950 prize. Out of 125 tickets, each costing $18, one ticket will win the prize, and the rest will win nothing. If you buy a ticket, what is the expected profit

Answer 1

The expected value formula is

`E=\Sigma x\cdot P(x)`

We know that there are 125 tickets, so the probability of the ticket is

`P(x)=(1)/(125)`

Then, we find the expected value

`E=950\cdot(1)/(125)=7.60`

Hence, the expected value is $7.60.