Question

b. Danny joined a charity event and there is a charity raffle. The first prize was RM100000, the second prize was RM20000 with a RM10000 third prize. The tickets were very expensive (RM2000) but the total number of tickets was restricted to only 1000. This contrasts with the usual situation of selling thousands of tickets for a small nominal amount. Danny likes to support charities and the prizes are very tempting.

1. If Danny buys a ticket, what is his expectation in terms of prize money?
2. What should the price of the ticket be in order for the raffle to be fair?

Answer 1

The given informations are:

the first prize was RM100000,

the second prize was RM20000

and the third prize was RM10000

Total number of tickets was 1000

cost of one tickets are RM 2000

So the total amount generated by selling all tickets is RM 1000 * RM 2000 = RM 2000000

i) Since the total amount of money generated by selling tickets was RM 2000000, so if Danny buys a ticket his expections about prize money should be such that if he win the first prize he should get around RM 1000000, if he win the second prize he should get around RM 500000 and if he win the third prize he should get atleast RM 100000.

ii) The total prize money was RM130000 and the total tickets was 1000, so the price of the tickets should be 130000/1000 = RM 130 in order for the raffle to be fair.