Answer: $1,894.55
Step-by-step explanation:
The expected value is the sum of the different outcomes multiplied by the probability that that particular outcome comes true.
Probability of winning = 1/29 tickets
Probability of losing = 28/29 tickets
Gain if you win
= Price - cost of tickets
= 55,000 - 2
= $54,998
Loss if lose:
= -$2
Expected value = (Probability of winning * gain if you win) + (Prob. of losing * loss)
= (1/29 * 54,998) + (28/29 * -2)
= $1,894.55
