Expected Net Winnings from 1,000 Raffle Tickets

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Homework Help Overview

The discussion revolves around calculating the expected net winnings from purchasing a raffle ticket in a scenario where 1,000 tickets are sold for $100 each, and the prize is $75,000. Participants are exploring the concept of expected value in this context.

Discussion Character

  • Exploratory, Conceptual clarification, Mathematical reasoning, Assumption checking

Approaches and Questions Raised

  • Participants are attempting to define "expected net winnings" and are discussing the implications of winning versus losing. Some are proposing equations to calculate expected values, while others are questioning the interpretation of the problem statement.

Discussion Status

There is an active exchange of ideas, with some participants providing links for further reading and others clarifying the distinction between net winnings and expected losses. Multiple interpretations of the problem are being explored, and guidance has been offered regarding the expected value concept.

Contextual Notes

Participants are noting potential ambiguities in the wording of the original problem, particularly regarding the definition of expected net winnings for the winner versus the overall expected value for a ticket purchase.

sdlisa
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Homework Statement


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.


Homework Equations





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.
Thanks for any help you can give me on this.
 
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So I'm thinking this is the equation:
(-$100 * 999/1000) + ($75,000 * 1/1000)

That makes the answer: -24.9

I'm not sure if this is correct.
 
This gives that a player on average will lose $24.90 on a $100 dollar bet.

Your questions asks for the expected net winnings for the winner so this is not the same thing. I was assuming this question was really about expected values and as you had had difficulty in finding anything about this I gave you the link.

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.
 
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.
 
HallsofIvy said:
What? The problem says expected net winnings.

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

I was querying whether this was what was actually asked.
 

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