The following is a probability distribution for the number of credit cards a person has. Number of Credit Cards 0 1 3 Probability: 0.200.30 0.200.15 0.10 0.05 a) Calculate the expected value or average number of credit cards a person has. Show Wor b) Interpret what that expected value mean in context to this scenario. 4,

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Author:Ron Larson
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Chapter8: Sequences, Series,and Probability
Section8.7: Probability
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The following is a probability distribution for the number of credit cards a person has.
Number of Credit Cards 0
1
3
4
5
Probability:
0.20 0.30 0.20 0.15 0.10 0.05
a) Calculate the expected value or average number of credit cards a person has. Show Work!
b) Interpret what that expected value mean in context to this scenario.
Expected Value Example 2:
The Red Cross is selling raffle tickets as a fund raiser. They have 10,000 tickets to sell for $1 each. They will
draw 3 winners after all the tickets are sold. The first-place winner will receive $750, second-place winner will
get $500 and the third-place winner gets $250.
a) Using the information above fill in the probability model in the table below:
Prize:
First Place Second Place Third Place None
$0
Amount:
Probability:
b) Calculate the expected value of a ticket? Show work!
c) Interpret what that expected value mean in context to this scenario.
Transcribed Image Text:The following is a probability distribution for the number of credit cards a person has. Number of Credit Cards 0 1 3 4 5 Probability: 0.20 0.30 0.20 0.15 0.10 0.05 a) Calculate the expected value or average number of credit cards a person has. Show Work! b) Interpret what that expected value mean in context to this scenario. Expected Value Example 2: The Red Cross is selling raffle tickets as a fund raiser. They have 10,000 tickets to sell for $1 each. They will draw 3 winners after all the tickets are sold. The first-place winner will receive $750, second-place winner will get $500 and the third-place winner gets $250. a) Using the information above fill in the probability model in the table below: Prize: First Place Second Place Third Place None $0 Amount: Probability: b) Calculate the expected value of a ticket? Show work! c) Interpret what that expected value mean in context to this scenario.
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