SOLUTION: A lottery has one $2000. prize, two $1000. prizes, and ten $500. prizes. Two thousand tickets are sold at $5.00 each. find the expectation if a person buys two tickets. Four choice

Question 149489: A lottery has one $2000. prize, two $1000. prizes, and ten $500. prizes. Two thousand tickets are sold at $5.00 each. find the expectation if a person buys two tickets. Four choices are -$.50, -$1.00, -$2.00, -$.25
How do I even go about wotking this?
Ellen
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A lottery has one $2000. prize, two $1000. prizes, and ten $500. prizes. Two thousand tickets are sold at $5.00 each. find the expectation if a person buys two tickets. Four choices are -$.50, -$1.00, -$2.00, -$.25
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The random variable values are 2000, 1000, 500, -5
The corresponding probabilities are (2/2000),(4/2000),(20/2000),(1976/2000)
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The expected value is (2/2000)*2000 + (4/2000)*1000 + (20/2000)*500 + (1976/2000)*(-5) = 2 + 2 + 5 -4.94 = $4.06
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Cheers,
Stan H.
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