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A group holds a raffle to raise money. They sell 100 raffle tickets for $5 each. There is one grand prize worth $100, three second place prizes worth $25 each and 5 3rd place prizes worth $10 each. Find the expected value associated with the purchase of one ticket.

Verified Answer :

pkmnmushy

What you need to do in order to find the expected value is multiplying each value by its probability, and then totalling. 
Thus prob($100) = 0.01 
prob($25) = 0.03 
prob($10) = 0.05 
So Expected value = $(1000.01 + 250.03 + 10*0.05) - $5 cost of ticket 
............................ = $2.25 - $5 
so the expected LOSS is $2.75 
I hope this can help you

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