Question

The student council is hosting a drawing to raise money for scholarships. They are selling tickets for $6 each and will sell 500 tickets. There is one $3,000 grand prize, three $200 second prizes, and thirteen $40 third prizes. You just bought a ticket. Find the expected value for your profit. Round to the nearest cent.

Answer 1

Answer: The student council is hosting a drawing to raise money for scholarships. They are selling tickets for $6 each and will sell 500 tickets. There is one $3,000 grand prize, three $200 second prizes, and thirteen S40 third prizes. You just bought a ticket.

Solution:

Given,

Sell 500 tickets, $6 for each

one $3,000 grand prize

three $200 second prize

thirteen $40 third prize

the expected value for your profit:

E(profit) = (1/500) * 3000 + (3/500) * 200 + (13/500) * 40

+((900-1-3-13)/500) * 0 - 6

= 6.00 + 1.20 + 1.04 + 0 - 6

= 2.24

Therefore, the expected value for profit is $2.24.