Question

A charity is holding a raffle and sells 2000 tickets for $2 each. One ticket will win a grand

prize of $500. Two other tickets will be selected to win consolation prizes of $50 each.
Find the expected value if you buy one raffle ticket.

You would expect to lose $1.80 for each ticket purchased
You would expect to lose $ 1.55 for each ticket purchased
You would expect to lose $1.70 for each ticket purchased
You would expect to lose $1.60 for each ticket purchased

Answer 1

Lose $1.70 for each ticket you purchase

Explanation:

($500 x 1/2000) + ($50 x 2/2000) - $2

$0.25 + $0.05 - $2

-$1.70