An auction website charges $1 for a bid. the bidding starts at 1¢ and goes up 1¢ at a time. a television that is worth $2000 is won, on average, with a bid of $160. you make one bid at random.

find the expected value of the outcome of the bid. (write as an exact decimal, with a negative sign, if necessary.)

expected value: $

The answer is: expected value is -$0.88

Step-by-step explanation:

Given is, the he bidding starts at 1¢ and goes up 1¢ at a time. A television that is worth $2000 is won, on average, with a bid of $160. So, $160 in 1¢ steps means 16000 bids.

Therefore, a person invest $1 with a 1/16000 probability of a $2000 return.  

Noe, the expected value will be =  

= -1+0.125 = -0.875 ≈ -$0.88

Hence, the answer is -$0.88