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There is a raffle for a $950 prize. Out of 125 tickets, each costing $18, one ticket will win the prize, and the rest will win nothing. If you buy a ticket, what is the expected profit

Respuesta :

The expected value formula is

[tex]E=\Sigma x\cdot P(x)[/tex]

We know that there are 125 tickets, so the probability of the ticket is

[tex]P(x)=\frac{1}{125}[/tex]

Then, we find the expected value

[tex]E=950\cdot\frac{1}{125}=7.60[/tex]

Hence, the expected value is $7.60.