Angelo's Pizza
Level
2
Angelo's Pizza is having a ticket raffle to raise money for new soccer uniforms. A $1 ticket gives an even chance to win $25 gift certificate, one $15 gift certificate, or three $5 gift certificates. What is the expected profit or loss for purchasing 1 ticket if 100 total tickets are sold?
Loss of 55¢
Gain of 45¢
Loss of 45¢
Gain of 55¢
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1 solution
To get the answer, you figure out the probability of winning at least 1 of the items. You get 5% since there is 100 tickets and 5 items. You then multiply 0.05 by each of the prizes ($25, $15, $5, $5, $5) and get the sum. The sum is 2.75. You then divide by 5 to get the mean. You get the answer, 0.55. This is how much you are expected to gain. A gain of 55¢ should be the answer, but the problem says you purchase a $1 ticket. This means you are expected to lose 45¢.