Question

Tiffany enters a raffle in which 400 people each pay $1 to enter. There will be eight random drawings with one $100 winner, two $25 winners, and five $10 winners. In the form of gains or losses, what is the expected profit?

Answer 1

$200

Explanation:

If tickets cost $1/ticket then it'll be $400 for all the tickets combined. If you add all the winners up then you will get $200 that is given back to them.

For example:

1 $100 winner =$100

2 $25 winner =$50

5 $10 winners =$50

All together it will add up to $200

So then we do the prize money minus our starting cost which is $400-$200. Which equals $200. You will give back $200 as prize money, and then $200 is a profit you will keep.