One thousand raffle tickets are sold for $2.00 each. One grand prize of $500 and two consolation prizes of $100 each will be awarded. Jeremy purchases one ticket. Find his expected value.

please show work!

Question

One thousand raffle tickets are sold for $2.00 each. One grand prize of $500 and two consolation prizes of $100 each will be awarded. Jeremy purchases one ticket. Find his expected value.

please show work!

anonymous · Answer

apparently you add all possibility of prize
500 + 100 +100 =700
there are 1000 tickets
1/1000 *700 =0.7

anonymous · Answer

ok have a question what about the $2.00 dollars?

anonymous · Answer

$ 2.00 is what he paid, $.70(our result ) is how much each ticket is worth based on winning chances

anonymous · Answer

oh okay i see!

anonymous · Answer

So, probibility wise he would lose 2-0.7 =$1.3

phi · Answer

http://en.wikipedia.org/wiki/Expected_value The expected value is the winnings weighted by the probability

phi · Answer

So $500*1/1000 + $200* 2/1000 - $2 *997/1000

anonymous · Answer

were did u get the 997 from!

anonymous · Answer

his chance of not winning any thing
since 997 tickets don't win anyting

phi · Answer

3 chances to win something, 997 to lose
3+997=1000

anonymous · Answer

that thow me off!

anonymous · Answer

phi are u corrected?

phi · Answer

??

anonymous · Answer

what im not if i i actually understand!

anonymous · Answer

sure

phi · Answer

Do you have an answer key?

anonymous · Answer

no

phi · Answer

Are you studying this or is  this a test to see how much math you remember?

anonymous · Answer

to see how much i remember!

phi · Answer

Oh oh.  There's a lot to remember.

phi · Answer

Have you ever tried Khan's site? http://www.khanacademy.org/video/expected-value--e-x?playlist=Probability It might help. It's only 15 minutes... just a small bag of popcorn, while you watch.

anonymous · Answer

ok

anonymous · Answer

thanks phi!