a church is running a raffle for its parishioners. the church is selling a ticke

Question

a church is running a raffle for its parishioners. the church is selling a ticket for $20. there are 3 different monetary prizes to be awarded. each ticket buyer has a .003 chance of winning $1000, a .011 chance of winning $200, and a .057 chance of winning $100. Note: if a parishioner were to win a prize, he will not have his $20 returned to him. A) determine the expected value, E, of the church for each ticket they sell.
B) the church hopes to sell 500 tickets. Determine their total profit if they were to reach this goal. a church is running a raffle for its parishioners. the church is selling a ticket for $20. there are 3 different monetary prizes to be awarded. each ticket buyer has a .003 chance of winning $1000, a .011 chance of winning $200, and a .057 chance of winning $100. Note: if a parishioner were to win a prize, he will not have his $20 returned to him. A) determine the expected value, E, of the church for each ticket they sell.
B) the church hopes to sell 500 tickets. Determine their total profit if they were to reach this goal. A) determine the expected value, E, of the church for each ticket they sell.
B) the church hopes to sell 500 tickets. Determine their total profit if they were to reach this goal.

Explanation / Answer

(A) Let X be the rv denoting the value of prizes won from each ticket.

E(X)=1000*0.003+200*0.011+100*0.057=$10.9

Thus, E=20-10.9 =$9.1

(B)If 500 tickets were sold,total profit=$9.1*500=$4550

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