The 8th grade class of City Middle School has decided to hold a raffle to raise money to fund a trophy cabinet as their legacy to the school. A local business leader with a condominium on St. Simons Island has donated a week’s vacation at his condominium to the winner—a prize worth $1200. The students plan to sell 2500 tickets for $1 each. 1) Suppose you buy 1 ticket. What is the probability that the ticket you buy is the winning ticket? (Assume that all 2500 tickets are sold.)
2) After thinking about the prize, you decide the prize is worth a bigger investment. So you buy 5 tickets. What is the probability that you have a winning ticket now?
3) Suppose 4 of your friends suggest that each of you buy 5 tickets, with the agreement that if any of the 25 tickets is selected, you’ll share the prize. What is the probability of having a winning ticket now?
4) At the last minute, another business leader offers 2 consolation prizes of a week-end at Hard Labor Creek State Park, worth around $400 each. Have your chances of holding a winning ticket changed? Explain your reasoning. Suppose that the same raffle is held every year. What would your average net winnings be, assuming that you and your 4 friends buy 5 $1 tickets each year?