A wheel has 38 numbers, 1, 2, 3, . . . , 38.....

Question

A wheel has 38 numbers, 1, 2, 3, . . . , 38. A player picks a number and bets $20. The wheel is spun, and if the player’s number results, he or she is paid $700 (and gets to keep the $20 bet). If another number results, the house keeps the $20. Suppose a typical player bets on 60 spins per hour. What is the expected net gain per hour for the house on each player

 

Full question, not sure how to set this up

Answer 1

E(x) = -700(1/38)+20(37/38) is the expected value for the house, which gets the $20 37 times out of 38, but pays out $700 the one time the number bet comes up.