Expected Net Winning

1. Apr 9, 2007

sdlisa

1. The problem statement, all variables and given/known data
1,000 raffle tickets are being sold for $100 each. The winning prize is worth$75,000. Find the expected net winnign for the winner if he/she buys one ticket.

2. Relevant equations

3. The attempt at a solution

I'm not exactly sure what the "expected" net winnings mean. I've been searching on the internet, but came up empty.

2. Apr 9, 2007

3. Apr 9, 2007

sdlisa

So I'm thinking this is the equation:
(-$100 * 999/1000) + ($75,000 * 1/1000)

I'm not sure if this is correct.

4. Apr 9, 2007

jing

This gives that a player on average will lose $24.90 on a$100 dollar bet.

Actually as worded the winner wins $75,000 on a$100 bet so his/her net winnings are $74,900. Suggest you look again at the wording of the question wherever it came from. 5. Apr 9, 2007 HallsofIvy Staff Emeritus What? The problem says expected net winnings. If he wins, he wins 75000 so his net winnings are$75000- 100= $74900. If he loses, his net "winnings" are -$100. The probability he will win is 1/1000 (one ticket out of 1000) and the probability he will lose is 999/1000. His expected net winnings are $74900(1/1000)-$100(999/1000)= (74900- 99900)/1000= -25000/1000= -\$25.

6. Apr 10, 2007

jing

The problem as stated by OP is the expected net winnings for the winner .

I was querying whether this was what was actually asked.