Consider the following game of chance based on the spinner b

Consider the following game of chance based on the spinner below: Each spin costs $4. If the spinner lands on A the player wins $8, if the spinner stops on C the player wins a penny otherwise the player wins nothing. Calculate the players expected winnings. Express your answer to at least three decimal places in dollar form.

Solution

Expected value wihtout spin cost = sum of prob of getting $s * respective prob of section(a,..d)

(3/11)*8 + (4/11)*0 + (2/11)*0 +(2/11)*(0.01)

=$2.1836

But everytime $4 is incurred for a spin.

So, Expected value = $2.1836 - $4 = -$1.816

On an average the wheel spinner is expected to loose this amount per spin.