Question

The student council is hosting a drawing to raise money for scholarships. They are selling tickets for $9 each and will sell 500 tickets. There is one $2,000 grand prize, three $300 second prizes, and eleven $40 third prizes. You just bought a ticket. Find the expected value for your profit. Round to the nearest cent.

Answer 1

Answer:

-$2.32

Step-by-step explanation:

Give that

The selling price per ticket is $9

And the number of tickets sold is 500

So,

There is one grand prize, three $300 second prize, and eleven $40 third prizes

We need to find out the expected value of the profit

$= \frac{1}{500} \times 2000 + \frac{3}{500} \times 300 + \frac{11}{500} \times 40$

= 4 + 1.8 + 0.88

= 6.68

Now the expected profit is

= $6.68 - $9

= -$2.32