SOLUTION: Suppose that there is a $5 raffle with prizes worth $1000, $500, and $250. Suppose 1000 tickets are sold and you purchase a ticket. Find your expected payback for this raffle.

Algebra ->  Probability-and-statistics -> SOLUTION: Suppose that there is a $5 raffle with prizes worth $1000, $500, and $250. Suppose 1000 tickets are sold and you purchase a ticket. Find your expected payback for this raffle.      Log On


   

Question 1167765: Suppose that there is a $5 raffle with prizes worth $1000, $500, and $250. Suppose 1000 tickets are sold and you purchase a ticket. Find your expected payback for this raffle.
Answer by ikleyn(52794) About Me  (Show Source):
You can put this solution on YOUR website!
.

Math expectation of winning amount is  


    1000%2F1000+%2B+500%2F1000+%2B+250%2F1000 = 1.75  dollars.


To get payback, you should subtract 5 dollars from it that you pay for a ticket.


Thus expected payback is  $1.75 - $5 = - $3.25.


It means that statistically you lose  $3.25 in average at each game, if you play many times.

Answered.