Question

A raffle has a grand prize of a European cruise valued at $10500 with a second prize of a Rocky Point vacation valued at $1400. If each ticket costs $5 and 10600 tickets are sold, what are the expected winnings far a ticket buyer? Express to at least three decimal place accuracy in dollar form (as opposed to cents).

Answer 1

Answer:

what are the expected winnings far a ticket buyer?

average loss on each ticket is -3.877

Explanation:

tthere are 10600 tickets sold at 5 dollars apiece.    

total money shelled out is 10600 * 5 = 53000    

one ticket wins 10500    

one ticket wins 1400.    

total value of all tickets sold is therefore -53000+ 10500 + 1400 = -41100    

the average gain on each ticket is therefore -41100 / 10600 = -3.877    

since a negative gains is a positive loss, then the average loss on each ticket is -3.877    

Answer 2

Answer:

Expected value = $ -3.641

Explanation:

The probability of winning the grand prize = 1/10600

The probability of winning the 10500 = 1/10600

The probability of winning the second prize = 1/10600

The probability of winning the 1400 = 1/10600

Expected value = -5 + 1/10600 * 13000 + 1/10600 * 1400

Expected value = $ -3.641