SOLUTION: PLEASE HELP!!!! Suppose a charitable organization decides to raise money by raffling a trip worth $500. If 3000 tickets are sold at $1 each, find the expected net winnings in do

Algebra ->  Probability-and-statistics -> SOLUTION: PLEASE HELP!!!! Suppose a charitable organization decides to raise money by raffling a trip worth $500. If 3000 tickets are sold at $1 each, find the expected net winnings in do      Log On


   

Question 675571: PLEASE HELP!!!!
Suppose a charitable organization decides to raise money by raffling a trip worth $500. If 3000 tickets are sold at $1 each, find the expected net winnings in dollars for a person who buys 1 ticket.
Answer by MathLover1(20850) About Me  (Show Source):
You can put this solution on YOUR website!

If he wins, the change in his financial holdings is $500-1=+499.
If he loses, the change in his financial holdings is $-1.
The probability he will win is 1%2F3000 (one ticket out of 3000)
and the probability he will lose is 2999%2F1000.
Therefore, his expected net winnings are:
E+=+499%281%2F3000%29+%2B+%28-1%29%282999%2F3000%29..........(winning $1 bet).

= %28499%2F3000%29%2B%28-2999%2F3000%29
= -2500%2F3000
= -0.83