Question

In a raffle where 8000 tickets are sold for $2 each, one prize of $4500 will be awarded. What is the expected value of a single ticket in the raffle?State your answer in terms of dollars rounded to the nearest cent (hundredth).

Answer 1

The expected value is $0.56

Explanation:

Given that

Total tickets = 8000 tickets

Each ticket is sold for $2 each

Hence, total income can be calculated as follows

Income = number of tickets * price per each ticket

Total income = 8000 * 2

Total income = $16, 000

Awarded prize = $4500

Expected return = Award prize / total income

Expected return = $4500/$16000

Expected return = 0.28125

Since each ticket is sold at $2

Expected value = 2 x 0.28125

Expected value = $0.56

Hence, the expected value is $0.56