Suppose you purchase a raffle ticket for $1.00. First prize is $5,000, second prize is $1,000, and third prize is $500. If 500 tickets are sold, what should you expect to win or lose? Round the answer to the nearest cent.
Stacey Warren - Expert brainly.com
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So, let's model this shall we?
First of all, how much is the total prize pool? Can you work that out for me?
They are giving out $6,500 in prize money and $500 worth of tickets are sold??
That's right, but more importantly, we have 500 competitors.
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Now of course, the correct answer is $0, since we don't expect to win anything from this single raffle draw. However, what I believe the question is asking.. "if we played the raffle an infinite number of times, how much would we win.. on average.. each time?". That's a much better way the question should be worded.
So, to answer that. We must distribute $6500 among 500 competitors. So how much would each competitor win on average if they played the game an infinite number of time? (hint: $6500/500)
That's right. Now. what was our investment (or cost) to play each time?
so the answer is B.?
Nope, answer my question first.
Each time we play, we win $13 on average. But we have to pay to play. How much do we pay to play?
it cost $1 to play each time
Great. So if we pay $1 to win $13, what is our total profit each time?