Calculating Probability in Casino Games: A Case Study in Roulette Betting

[rowdy3]

When you give the Venetian casino in Las Vegas $5 for a bet on the number 7 in roulette, you have a 37/38 probability of losing $5 and you have a 1/38 probability of making a net gain of $175.
There's a example close to this problem in my book and followed the steps. I made a table and did the following:
I did $-5 x 37/38(.974) = -4.87
I did $5 x 1/38(.026) = + 0.13
= -4.74. The answer is -. 26 cents. What did I do wrong?

 

[Mark44]

Your second expected value should be 175*(1/38), which comes out to about $4.61.
-$4.87 + $4.61 = -$.26,

Note that the answer is probably NOT -.26 cents, which would be a fraction of a penny.

 

[rowdy3]

Thanks.