Question

For a fundraiser, there is a raffle with 200 tickets. One ticket will win a $470 prize, and the other tickets will win nothing. If you have a ticket, what is the expected payoff?

Answer 1

There are 200 raffle tickets, so the probability of winning is

$\frac{1}{200}$

The probability of losing is, therefore,

$\frac{199}{200}$

The gain when winning is

$470\text{ dollars}$

The loss is

$0\text{ dollars}$

The Expected payoff is, therefore,

$\begin{gathered} \frac{1}{200}(470)+\frac{199}{200}(0)= \\ \frac{470}{200}\text{ + 0} \\ 2.35\text{ Dollars} \end{gathered}$