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

Answer:

-0.352

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 = $\frac{1}{14,500}$

Probability of winning 3 prizes of $800 = $\frac{3}{14,500}$

Probability of winning 3 prizes of $65 = $\frac{3}{14,500}$

Probability of winning 10 prizes of $20 = $\frac{10}{14,500}$

Expected value:

$=[(\frac{1}{14,500}\times 6,600) + (\frac{3}{14,500}\times 800) + (\frac{3}{14,500}\times 65) + (\frac{10}{14,500}\times 20)] - 1$

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

= 0.648 - 1

= -0.352