Question

At a raffle, 1000 tickets are being sold for $10 each. There is one prize of $500, two prizes of $250, three prizes of $150, and four prizes of $75. If you buy one ticket, what is the expected value of your gain?

Answer 1

Answer:

expected value is $175

Explanation:

given data

tickets = 1000

sold = $10 each

one prize = $500

two prizes = $250

three prizes = $150

four prizes = $75

solution

we get here expected value that is

E(x) = ∑x P(x)   ....................1

and here total prize is 1+2+3+4 = 10

so here P(x) for x will be as

x            P(x)

$500      $\frac{1}{10}$

$250      $\frac{2}{10}$

$150       $\frac{3}{10}$

$75         $\frac{4}{10}$

so here E(x) will be

E(x) = $500 × $\frac{1}{10}$ + $250 × $\frac{2}{10}$ + $150 × $\frac{3}{10}$ + $75 × $\frac{4}{10}$

solve it we get

E(x) = $175