SOLUTION: A raffle has a grand prize of a Caribbean cruise valued at $14,000 with for each ticketa second prize of a Las Vegas getaway valued at $800. If each ticket costs $5 and 8800 ticke

Algebra ->  Statistics  -> Central-limit-theorem -> SOLUTION: A raffle has a grand prize of a Caribbean cruise valued at $14,000 with for each ticketa second prize of a Las Vegas getaway valued at $800. If each ticket costs $5 and 8800 ticke      Log On


   

Question 1128748: A raffle has a grand prize of a Caribbean cruise valued at $14,000 with for each ticketa second prize of a Las Vegas getaway valued at $800. If each ticket costs $5 and 8800 tickets are sold, what are the expected winnings far a ticket buyer? Round to the nearest penny.
Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!


(1/8880) * $14,000 for the grand prize
(1/8880) * $800 for the second prize

Total expected value:

%281%2F8880%29%2A14000%2B%281%2F8880%29%2A800+=+14800%2F8880+=+5%2F3

The expected winnings (payout) is 5/3 of a dollar for each ticket. To the nearest penny, that is $1.67.

If you include the $5 cost of the ticket, the expected "winnings" is $1.67-$5 = -$3.33.