Question

raffle is being held at a benefit concert. The prizes are awarded as follows: 1 grand prize of $6,600.00, 3 prizes of $800.00, 3 prize of $65.00, and 10 prizes of $20.00. Suppose 14500 raffle tickets are sold, if you buy one ticket for $1.00 then what is your expected value for this raffle?

Answer 1

-0.352

Step-by-step explanation:

Total number of raffle tickets sold = 14,500

1 grand prize of $6,600, 3 prizes of $800, 3 prizes of $65 and 10 prizes of $20.

Therefore,

Probability of winning 1 grand prize of $6,600 =
`(1)/(14,500)`

Probability of winning 3 prizes of $800 =
`(3)/(14,500)`

Probability of winning 3 prizes of $65 =
`(3)/(14,500)`

Probability of winning 10 prizes of $20 =
`(10)/(14,500)`

Expected value:

`=[((1)/(14,500)* 6,600) + ((3)/(14,500)* 800) + ((3)/(14,500)* 65) + ((10)/(14,500)* 20)] - 1`

`=(0.455+0.166+0.013+0.014)-1`

= 0.648 - 1

= -0.352