Question

A local flower shop is selling $1 raffle tickets and is donating all proceeds to the children's hospital. They sold 5,500 tickets and plan to give away 20 flower arrangements valued at $70 and 20 gift certificates valued at $25. Find the expected value of purchasing a raffle ticket.
Round to the nearest cent. Do not round until the final calculation.

Answer 1

Answer: The expected value of purchasing a raffle ticket would be $0.3449.

Step-by-step explanation:

Since we have given that

Number of tickets = 5500

Number of flower arrangements = 20

Number of gift certificates = 20

So, Probability that wining $70 at flower arrangement = $\dfrac{20}{5500}=\dfrac{1}{275}$

Probability that wining $25 at gift certificates = $\dfrac{20}{5500}=\dfrac{1}{275}$

So, Expected value of purchasing a raffle ticket would be

$70\times \dfrac{1}{275}+25\times \dfrac{1}{275}\\\\=0.254+0.0909\\=\ 0.3449$

Hence, the expected value of purchasing a raffle ticket would be $0.3449.