Question

Debra is buying prizes for a game at her school's fundraiser. The game has three levels of prizes, and she has already bought the second and third prizes. She wants the first prize to be nice enough to attract people to the game. The game's manufacturer has supplied her with the probabilities of winning first, second, and third prizes. Tickets cost $3 each, and she wants the school to profit an average of $1 per ticket. How much should she spend on each first prize? (Round your answer to two decimal places.)

Prize	Cost of Prize	Probability
1st	$	.15
2nd	$1.25	.30
3rd	$0.70	.45

Answer 1

E(x) = 0.15*x + 0.30*1.25 + 0.45*0.70 = -1

x = -11.27

The 1st prize should be $11.27.