SOLUTION: I don't know what this would fall under, in my text it is under expectations in probability: 500 raffle tickets are sold at $2.00 each. One grand prize is $100.00 and two conso

Algebra ->  Probability-and-statistics -> SOLUTION: I don't know what this would fall under, in my text it is under expectations in probability: 500 raffle tickets are sold at $2.00 each. One grand prize is $100.00 and two conso      Log On


   

Question 126400: I don't know what this would fall under, in my text it is under expectations in probability:
500 raffle tickets are sold at $2.00 each. One grand prize is $100.00 and two consolation prizes of $50.00 will be awarded. Find Jake's expectation if he purchases one ticket.
I set my problem up as:
1%2898%29%2F500+%2B+1%2848%29%2F500+%2B+1%2848%29%2F500+-+497%28-2%29%2F500
98%2F500+%2B+48%2F500+%2B+48%2F500+-+994%2F500+=+-800%2F500+=+-1.60
Jake's expectation would be to loose $1.60
Is this the right way to set this up?
Thanks for your help!
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
Let's say your random variable is "gain"
Values of the random variable are : 100 , 50, 50, -2
Corresponding probabilitis are....: 1/500,1/500,1/500,499/500
Multiplying corresponding parts and adding you get:
100*(1/500) + 50(1/500) + 50(1/500) - 2(499/500)
= -1.596
===============
Cheers,
Stan H.