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Posted by on Saturday, July 30, 2011 at 3:01pm.

One thousand raffle tickets are sold for $1.00 each. One grand prize of $400 and two consolation prizes of $100 each will be awarded. Jeremy purchases one ticket. Find his expected value.

??

  • Math - , Saturday, July 30, 2011 at 3:05pm

    Think of what you'll get if you bought all the tickets, and go from there.

  • Math - , Saturday, July 30, 2011 at 3:11pm

    1,000-600=400 ??

  • Math - , Saturday, July 30, 2011 at 3:40pm

    If you bought all 1000 tickets, it would have cost you $1000.
    However, you would get the grand prize of $400 and 2 consolation prizes of $100 each for a total of $600.
    So you get back $600 for the $1000 that you spent, or, on the average, $0.60 for each ticket you buy.

  • Math - , Saturday, July 30, 2011 at 3:45pm

    so his expected value is $600?

  • Math - , Saturday, July 30, 2011 at 3:52pm

    What is Jeremy's expected value?

  • Math - , Saturday, July 30, 2011 at 3:59pm

    $600? or $400??

  • Math - , Saturday, July 30, 2011 at 6:04pm

    But Jen, in the end he only bought one ticket, not 1000. 600/1000
    MathMate already told you the answer.

  • Math - , Saturday, July 30, 2011 at 6:16pm

    Perhaps it is easier from the point of view of the seller.
    Sold 1000 tickets for 1000 dollars.
    Gave out 600.
    So .6 of the income is paid out. So if you put in $1, you can expect .6 * $1 = $0.60

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