Suppose you purchase a raffle ticket for $1.00. First prize is $5,000, second prize is $1,000, and third prize is $500. If 500 tickets are sold, what should you expect to win or lose? Round your answer to the nearest cent.
$0.99 loss
$13.00 loss
$10.00 gain
$12.00 gain

Question

amistre64 · Answer

$$\sum x~P(x)$$

amistre64 · Answer

-1    * P(no prize) 
+ 5000 * P(1st prize) 
+ 1000 * P(2nd prize) 
+  500  * P(3rd prize) 
--------------------
  expected winnings