Question

A raffle has a grand prize of a Caribbean cruise valued at $6000 with a second prize of a resort vacation valued at $1400. If each ticket costs $5 and 10400 tickets are sold, what are the expected winnings for a ticket buyer? Express to at least three decimal place accuracy in dollar form (as opposed to cents).

Answer 1

expected winnings = sum of (net gain)*(probability)
3 cases: win grand prize, win 2nd, or win nothing

grand prize:
net gain = 6000 -5 = 5995
probability = 1/10,400

2nd prize:
net gain = 1400 -5 = 1395
probability = 1/10,400

win nothing:
net gain = -5
probability = 10,398/10,400

--> 5995/10400 + 1395/10400 - (5*10398)/10400

--> -44600/10400

--> -4.29

*odds are definately not in your favor :)

Answer 2

Thank you so much!!

Answer 3

your welcome