SOLUTION: A school fundraiser charges $5 to play. Player flips a coin. If coin lands on Tails,the player looses and gets nothing. If coin lands on heads, player gets to flip a second time;p

Algebra ->  Permutations -> SOLUTION: A school fundraiser charges $5 to play. Player flips a coin. If coin lands on Tails,the player looses and gets nothing. If coin lands on heads, player gets to flip a second time;p      Log On


   

Question 909723: A school fundraiser charges $5 to play. Player flips a coin. If coin lands on Tails,the player looses and gets nothing. If coin lands on heads, player gets to flip a second time;player would then either win $5 plus gets $5 back if comes as heads or just $5 if tails.
What is the expected value of the payout in this game?
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
A school fundraiser charges $5 to play. Player flips a coin.
If coin lands on Tails,the player looses and gets nothing.
His gain is -$5
Note: P(tails) = 1/2
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If coin lands on heads, player gets to flip a second time;player would then either win $5 plus gets $5 back if comes as heads or just $5 if tails.
If heads/heads win $5 : probability = 1/4
If heads/tails : wins 0; probability = 1/4
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What is the expected value of the payout in this game?
Expected gain = (1/2)(-5) + (1/4)5 + (1/4)0 = -5/2 + 5/4 = -5/4 = -$1.25
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Cheers,
Stan H.
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