SOLUTION: Suppose that there is a $5 raffle with prizes worth $1000, $500, and $250. Suppose 1000 tickets are sold and you purchase a ticket. Find your expected payback for this raffle.

Question 1167765: Suppose that there is a $5 raffle with prizes worth $1000, $500, and $250. Suppose 1000 tickets are sold and you purchase a ticket. Find your expected payback for this raffle.
Answer by ikleyn(52797) (Show Source): You can put this solution on YOUR website!
.


Math expectation of winning amount is  


     = 1.75  dollars.


To get payback, you should subtract 5 dollars from it that you pay for a ticket.


Thus expected payback is  $1.75 - $5 = - $3.25.


It means that statistically you lose  $3.25 in average at each game, if you play many times.

Answered.

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