If a service club sells 500 raffle tickets for a color telev

If a service club sells 500 raffle tickets for a color television set worth $380, what is the mathematical expectation of a person who buys one of these tickets? A person gets $2.60 if he draws an ace from an ordinary deck of 52 playing cards and nothing if he draws any other card. How much should he be charged for playing this game so that he can expect to break even?

Solution

1. If 500 raffle tickets are issued for a color televsion set worth a = $380

The probabilty for each ticket is p = 1/500.

The Expectation of a person who buys one of these tickets is a*p = 380*(1/500) =$0.76

2. A person gets amount a = $2.60 if he drawn an ace from an ordinary deck of 52 playing cards. (nothing if he dran any other card)

P(draw ace card from deck of 52 cards) = 4/52 = p

then

His mathematical expectation of his amount = a*p = 2.60*(4/52) = $0.2