Probability on games

Question

You choose to participate in a raffle . Raffle tickets sell for $5 each and there are a total of 10000 tickets . The prizes in this raffle are

* 1st prize $20,000 college scholarships (1 winner)

* 2nd prize $10,000 college scholarship (2 winner)

* 3rd prize $ 1,000 college scholarship (5 winner)

* 4th prize $100 college scholarship (50 winners)

You purchase one $5 raffle ticket . How much of your college tuition can you expect to be paid for

by your raffle ticket purchase .

Answer 1

Sum of each probability x pay off

= (1/10K)20K + (1/10K)10K + (1/10K)K + (1/10K)100 +(10K-4)(0)

=2 + 1 +0.1 + 0.01 = $ 3.11

You paid $5 for a raffle ticket and you're expected return is $3.11 in scholarship money. Or rather you expect to lose $5-$3.11 = $1.89 loss

You have 1/10000 chance for each of the four prizes

=(1/10000)(20K+10K+K+100) = (1/10K)(31.1K) = 31.1/10 = $3.11

Return minus the cost = $1.89 loss

That's the average or mean return or expected value. the value of the raffle ticket is negative one dollar and 89 cents. The median or mode return is a loss of $5.00