Question

A raffle has a grand prize of a European cruise valued at $10000 with a second prize of a Rocky Point vacation valued at $700. If each ticket costs $4 and 11000 tickets are sold, what are the expected winnings for a ticket buyer?

Answer 1

- 3.027

Explanation:

First price = 10000 ; second price = 700

Number of tickets sold = 11000

Ticket cost = $4

Probability that a ticket wins grand price = 1 / 11000

Probability that a ticket wins second price = 1 / 11000

X ____ 10000 _____ 700

P(x) ___ 1 / 11000 ___ 1/11000

Expected winning for a ticket buyer :

E(X) = Σx*p(x)

E(X) = (1/11000 * 10000) + (1/11000 * 700) - ticket cost

E(X) = 0.9090909 + 0.0636363 - 4

E(X) = - 3.0272728

E(X) = - 3.027