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Posted by on Sunday, October 23, 2011 at 5:18pm.

A community 5K run will award $50 to the winner. 60 people enter the race, and they each pay an entry fee of $20. Assuming they are all equally likely to win, what is a fair price for the competition? Round to the nearest cent

Can anyone help me get started on this one?

  • college math - , Sunday, August 26, 2012 at 9:54pm

    Random-gain values: 50-20 = 30 ; -20
    Probabilities: 1/60 ; 59/60
    -----------
    E(gain)= 30(1/60)-20(59/60) = 1/2 - (59/3)= (3-59)/6 = -$9.33
    ----
    A fair price would be 20-9.33 = $10.67

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