The college hiking club is having a fund raiser to buy new equipment for fall and winter outings. The club is selling Chinese fortune cookies at a price of $3 per cookie. Each cookie contains a piece of paper with a different number written on it. A random drawing will determine which number is the winner of a dinner for two at a local Chinese restaurant. The dinner is valued at $31. Since fortune cookies are donated to the club, we can ignore the cost of the cookies. The club sold 724 cookies before the drawing. Lisa bought 21 cookies. Lisa's expected earnings can be found by multiplying the value of the dinner by the probability that she will win. How much did she effectively contribute to the hiking club?
If Lisa buys 21 cookies, what is her probability of winning the free dinner ?
= No. of cookies she bought/Total no. of cookies
=21/724
= 0.029
Lisa’s expected earnings can be found by multiplying the value of the dinner by the probability that she will win. What are Lisa’s expected earnings
= Probability she will win × Value of the dinner
=0.029 * 31
= 0.90
How much did she effectively contribute to the hiking club?
= Money she paid − her expected earnings
=21 - 0.90
=20.10
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