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Hi, Where does the -0.9975 (5) come from and how is the ending answer: =1.925-4.9875 = -3.06? Thank you :)

Hi, Where does the -0.9975 (5) come from and how is the ending answer: =1.925-4.9875 = -3.06? Thank you :)

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Hi,

Where does the -0.9975 (5) come from and how is the ending answer: =1.925-4.9875 = -3.06?

Thank you :)

The probability distribution for the possible gainsis calculated as follows: Gain (x) $2,000 $1,000 $500 $250 $100-$5 Probability P(x) Also, -$5 represents the loss of buying a ticket; the others are prize money won from buying a ticket. The expected value is calculated as follows: E (x) = x- P(x) $2,000 2,000+ $1,000 2,000 + $500- $100- = 1,995 2,000 2,000 2,000 2,000 2,000 2,000 - -$51.995 2,000 2,000 = +$250 2,000 + 2,000 = 1 + 0.5 +0.25 +0.125 + 0.05 - 0.9975 (5) 1.925 - 4.9875 = -3.06 Thus, the expected value for buying a ticket worth $5 is -$3.06. Conclusion: If a person buys one ticket worth $5, then the person is expected to lose approximately $4. This is because the expected value for buying a ticket worth $5 is negative.
Transcribed Image Text:The probability distribution for the possible gainsis calculated as follows: Gain (x) $2,000 $1,000 $500 $250 $100-$5 Probability P(x) Also, -$5 represents the loss of buying a ticket; the others are prize money won from buying a ticket. The expected value is calculated as follows: E (x) = x- P(x) $2,000 2,000+ $1,000 2,000 + $500- $100- = 1,995 2,000 2,000 2,000 2,000 2,000 2,000 - -$51.995 2,000 2,000 = +$250 2,000 + 2,000 = 1 + 0.5 +0.25 +0.125 + 0.05 - 0.9975 (5) 1.925 - 4.9875 = -3.06 Thus, the expected value for buying a ticket worth $5 is -$3.06. Conclusion: If a person buys one ticket worth $5, then the person is expected to lose approximately $4. This is because the expected value for buying a ticket worth $5 is negative.
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I see how you got- 3.0625 loss per ticket, however where are you getting 4.9875 from? I took each dollar amount for example $2000 times 1 divide into 2000 and I did this with the remaining cash values of 1000, 500, 250, 100 and - 5 for which they are divided with the denominator of 2000.

When I add up the figures from $2000 all the way to $100 it equals 1.925. None of my calculations show 4.9875 where is this particular figure coming from? Thank you.

I end up with 1.925 with a negative 0.9975 but nowhere am I getting the amount of 4.9875 no matter how many times I've tried. Could you please show where this figure is coming from for the final answer on this solution. Thank you.

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