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Probability casino question

  1. Oct 22, 2009 #1
    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?
     
  2. jcsd
  3. Oct 22, 2009 #2

    Mark44

    Staff: Mentor

    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.
     
  4. Oct 23, 2009 #3
    Thanks.
     
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