a cash prize of $4600 is to be awarded at a fundraiser. if 2300 tickets are sold at $7 each, find the expected value.
Expected Value E(x) is:
E(x) = Probability of winning * Winning Price - Probability of losing * Ticket Price
Since only 1 cash price will be given, 2299 will be losers:
E(x) = 4600 * (1/2300) - 2299/2300 * 7
E(x) = 2 - 0.99956521739 * 7
E(x) - 2 - 7
E(x) = -5
Expected Value E(x) is:
E(x) = Probability of winning * Winning Price - Probability of losing * Ticket Price
Since only 1 cash price will be given, 2299 will be losers:
E(x) = 4600 * (1/2300) - 2299/2300 * 7
E(x) = 2 - 0.99956521739 * 7
E(x) - 2 - 7
E(x) = -5