StatisticsdrillExpected value of a raffle ticket
A statistics problem from Statisticsdrill. Solve it with one answer box, with a fresh sample on every attempt and the worked steps and spreadsheet function in the answer, and it is checked the moment you submit.
The task
A charity sells 500 raffle tickets at $2 each. One ticket wins $2,500 and 5 other tickets win $100 each. What is the expected net gain (prize minus ticket price) for one ticket? A loss is negative. Give dollars and cents.
What this problem teaches
The formula: E[net] = Σ (prize × P(prize)) - price.
A hint if you get stuck
Expected prize = Σ prize × probability. Each ticket has a 1 in N chance per prize. Then subtract the ticket price.
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