SOLUTION: 1000 tickets were sold at $2 each for three prizes of $250, $100, $50. Only one prize per selected ticket. Find the expected value?

Question 256420: 1000 tickets were sold at $2 each for three prizes of $250, $100, $50. Only one prize per selected ticket. Find the expected value?
Found 2 solutions by stanbon, richwmiller:
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
1000 tickets were sold at $2 each for three prizes of $250, $100, $50. Only one prize per selected ticket. Find the expected value?
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Random number values: -2, 248, 98, 48
Corresponding probabilities: 997/1000, 1/1000, 1/1000, 1/1000
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Expected value:
E(x) = (-2*997 + 248*1 + 98*1 + 48*1)/1000
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E(x) = -1600/1000 = -$1.60
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Cheers,
Stan H.
Answer by richwmiller(17219) (Show Source): You can put this solution on YOUR website!
1000*2=2000 dollars received
prizes 250+100+50=400
2000-400
$1600 profit for this illegal gambling. Nice racket!
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