Question

A math club is researching a golf tournament fund-raiser. it will cost $1,000 to host the tournament. if it rains, the club will lose the investment. if it is sunny, it is expected that the club will collect $4,500 from the participants. if the chance of rain is 20%, what is the expected value for the tournament?

Answer 1

The expected value of tournament is $2600.

According to the statement

we have given that the tournament will cost $1000 and if it is sunny, it is expected that the club will collect $4,500 from the participants. And we have to find the expected value of a tournament.

So, we know that the

Cost of hosting the tournament : $1,000

If it rains, the club will lose the investment: $ -1,000

If it is sunny, the club will collect $4,500 ;

From all this the profit they will get

profit: 4,500 - 1000 = 3,500

And

There is a chance of 20% then

The club will loss the investment is

-1000*20 = -200

And

Effect on their profit if there is a rain then

3500*80 = 2800

then

The expected value of tournament is 2800-200=2600.

So,The expected value of tournament is $2600.

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