SOLUTION: A raffle offers a first prize of $500, and two second prizes of $50 each. One ticket costs $2, and 1000 tickets are sold. Find the expected winnings for a person who buys one ticke

Question 285602: A raffle offers a first prize of $500, and two second prizes of $50 each. One ticket costs $2, and 1000 tickets are sold. Find the expected winnings for a person who buys one ticket.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A raffle offers a first prize of $500,
and two second prizes of $50 each.
One ticket costs $2, and 1000 tickets are sold.
Find the expected winnings for a person who buys one ticket.
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Random winning values are: 498,48,-2
Correspondiing probabilities are: 1/500, 2/500, 497/500
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Expected winnings = (498+2(48)+(497)(-2))/500
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= (498 + 96 - 994)/500
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= (-400/500)
= -4/5
= -$0.80
============================
Cheers,
Stan H.
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