SOLUTION: A company is selling raffle tickets for $4. The first prize is $3500,
and the second prize is $500. The company manages to sell 5000 tickets.
X 3496 496 -4
P(x) 1/5000 1/5000 49
Algebra ->
Probability-and-statistics
-> SOLUTION: A company is selling raffle tickets for $4. The first prize is $3500,
and the second prize is $500. The company manages to sell 5000 tickets.
X 3496 496 -4
P(x) 1/5000 1/5000 49
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Question 1162300: A company is selling raffle tickets for $4. The first prize is $3500,
and the second prize is $500. The company manages to sell 5000 tickets.
X 3496 496 -4
P(x) 1/5000 1/5000 4998/5000
What is the Expected Value?
Formally, the expected value is the sum of each outcome multiplied by its probability. So in this example the expected value is
The expected value is -$3.20.
While that is the formal mathematical way to calculate expected value, in many simple expected value problems like this, there is a much easier way to find the expected value.
In this example, the total cost of the tickets is $20,000; the total payout is $3500+$500 = $4000. The expected value is then
