Five thousand tickets are sold at $1 each for a charity raffle. Tickets are to be drawn at random and monetary prizes awarded as follows: 1 prize of $800, 3 prizes of $200, 5 prizes of $50, and 20 prizes of $5. What is the expected value of this raffle if you buy 1 ticket?

The expected value of this raffle if you buy 1 ticket is $0.41.

Step-by-step explanation:

The expected value of the raffle if we buy one ticket is the sum of the prizes multiplied by each of its probabilities.

This can be written as:

For example, the first prize is $800 and we have only 1 prize, that divided by the number of tickets gives us a probability of 1/5000.

If we do this with all the prizes, we can calculate the expected value of a ticket.

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