Data Description HW question

Question

A nonprofit organization sells chances for a $68,000 classic Mustang at $100 per ticket. It sells 1500 tickets and offers four prizes, summarized in the table. What are the expected winnings (or loss) for each ticket? (Round your answer to the nearest cent.)



Prizes Amount

First	$68,000
Second	8,800
Third	3,100
Fourth	700

a) There is an expected loss of $___

Answer 1

At $100 dollars per ticket with 1,500 tickets, the total money made is $150,000. Only one first, second, third and fourth place prize is given, leaving 1,496 participants with the remaining pot. The money that remains can be found by subtracting the prizes from the total pot (150,000-68,000-8,800-3,100-700= $69,400)

Thus, you have a 1/1,500 to get all four prizes and a 1496/1500 chance of losing out (-$100). Calculating the expected loss goes as follows...

(1/1500*67,900) + (1/1500*8,700) + (1/1500*3000) + (1/1500*600) + (1496/1500*-100)

45.26666 + 5.8 + 2 + 0.4 + -99.7333

-$46.27

You are expected to lose $46.27 cents for each ticket.