A game show contestant is offered the option of receiving a

A game show contestant is offered the option of receiving a computer system worth exist2200 or accepting a chance to win either a luxury vacation worth exist4500 or a boat worth exist7000. If the second option is chosen the contestants probabilities of winning the vacation or the boat are 0.20 and 0.15, respectively If the contestant wore to turn down the computer system and go for one of the other prizes, what would be the expected winnings? The expected winnings are exist.

Solution

Winning a vacation worth of $ 4500 ---- probability = 0.20

Winning a boat worth of $ 7000 ----- probablitiy = 0.15

So, expected winnings are = 4500*0.20 + 7000*0. 15 = $1950