Question 211235: HELP! these probability questions are driving me nuts. please show me the solution to this one.
1000 raffle tickets are sold at $3 each. One grand prize of $100 and two consolation prozes of $75 will be awarded. Find Jake's expectationif he purchases one ticket.
A) -$2.75 B) -$3.00 C) $0.24 D)$2.75 E) $3.00
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! 1000 raffle tickets are sold at $3 each. One grand prize of $100 and two consolation prozes of $75 will be awarded. Find Jake's expectation if he purchases one ticket.
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Let the random variable be "Jake's winnings".
The random number values are 97, 72, 72, -3
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The corresponding probabilites are 1/1000, 1/1000, 1/1000, 997/1000
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E(X) = 97(0.001) + 72(0.001) + 72(0.001) - 3(997/1000) =
= [97 + 2*72 - 2991]/1000 = -2750/1000 = -$2.75
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He can expect to lose $2.75 cents on every ticket he buys.
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Cheers,
Stan H.
A) -$2.75 B) -$3.00 C) $0.24 D)$2.75 E) $3.00
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