posted by James on .
Volunteers working to raise funds for a new community library sold 1000 raffle tickets at $10 each. Tickets are to be randomly drawn and prizes are awarded as follows: one prize of $1,000, twenty prizes of $50 and one hundred prizes of $20. What is the expected value of this raffle to you if you buy just one ticket? What is the expected value of this raffle if you buy all of the tickets?
Compute the total prize money awarded. Just add them up. Looks like it's $4000.
That total is the expected value of the raffle.
1/1000 of that total is the expected value of a single ticket.
I don't know!
-6.09, take the difference of getting a $1000 ticket and the cost you paid for it and multiply it by the probability of getting one of those tickets. The same thing goes for the $50 ticket, $20 ticket, and the cost of no winning ticks (-$10). After that find the sum of all of the products and that will be the expected value of winning one ticket.