SOLUTION: A charitable organization is selling raffle tickets for $4 . The first prize a computer valued at $2780 second prize is a set of cookware valued at $940. The remaining prizes are 3

Question 1125529: A charitable organization is selling raffle tickets for $4 . The first prize a computer valued at $2780 second prize is a set of cookware valued at $940. The remaining prizes are 30 third prize gift certificates each valued at $35.suppose 3500 tickets were sold and you bought 1 ticket what is the expected value of your gain or loss? Express your answer in dollars and cent's rounded to the nearest penny I.e. 2 decimal places

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
3500 tickets are sold.
each ticket costs $4.00.
1 ticket will get you a prize worth 2780.
1 ticket will get you a prize worth 940.
30 tickets will get you a gift certificate worth 35 each.

the probability of having to pay for a ticket is 1.
the probability of getting the ticket worth 2700 is 1/3500.
the probability of getting the ticket worth 940 is 1/3500.
the probability of getting one of the tickets worth 35 is 30/3500.

your expected value is 1 * -4 + 1/3500 * 2780 + 1/3500 * 940 + 30/3500 * 35.

that gets you an expected value of -2.637142857.

you gave them 4 dollars and your expected prize money was 1.362857143.

your net value was -4 + 1.362857143 = -2.637142857.

what does this mean?

assume you bought all 3500 tickets.

you would have paid 3500 * 4 = 14,000 dollars.
you would get back 2780 + 940 + 30 * 35 = 4,770 dollars.

you would have netted 4,770 - 14,000 = -9230 dollars.

divide that by 3500 tickets and the average net would be -2.637142857 dollars.

RELATED QUESTIONS
A charitable organization is selling raffle tickets for $4 . The first prize a laptop... (answered by stanbon)

A charity organization is selling $10 raffle tickets to raise money for its cause. The... (answered by ikleyn)

a rotary club is holding a charity fundraise to bolster its college scholarship fund. The (answered by stanbon)

How many distinguishable way can these letters "unoppolati" be arranged? Is there one... (answered by ikleyn)

Please show me specific detailed answers to these question i got wrong on my test.... (answered by stanbon)

There are 205 raffle tickets sold at a school charity event. The event will award three... (answered by Fombitz)

A civic group sells 1000 raffle tickets to raise $2500 for its namesake charity. First... (answered by lynnlo)

For this problem find the expected value. A company is selling raffle benefit tickets... (answered by solver91311)

A company is selling raffle tickets for $4. The first prize is $3500, and the second... (answered by greenestamps)