Name: Domingo, Rocel C.

Score: _______________
Course/Yr./Sec.: BSAIS 1-A Date: December 11, 2020

Enrichment Exercise

1. A lottery offers one P600,000 prize, two P150,000, and four P35,000 prizes. Fifty thousand
tickers are sold at P60 each. Find the expectation if a person buys 25 tickers.

Gain X P598,500 P148,500 P33,500 P-1,500

Probability (Px) 1/50,000 2/50,000 4/50,000 49,825/50,000

Solution:
E(x) = Σ [ x · P(x)]
E(x) = (598,500) 25/50,000 + (148,500) 50/50,000 + (33,500) 100/50,000
E(x) = 299.25 + 148.50 + 67
E(x) = P514.75
E(x) = (-1,500) 49,825/50,000
E(x) = P1,494.75
E(x) = P514.75 - P1494.75
E(x) = P-980
 In this case, 25 tickets are expected to win P514.75, ticket purchased cost P60*25 =
P1,500. The probability of expected winning in 25 tickets to include cost then 25 tickets
is expected to lose P980.

2. If a person rolls a pair of dice and gets sum of 7 or 8, he wins P800. If the person gets a 6 or 9, he
wins P550. The cost to play the games P120. Find the expectation of the game.
Solution:
Prob (7) = 6/36 > (6,1), (2,5), (3,4), (4,3), (5,2), (6,1)
Prob (8) = 5/36 > (6,2), (3,5), (4,4), (5,3), (6,2)
So Prob (7 or 8) = 11/36
Prob (6) = 5/36 > (1,5), (2,4), (3,3), (4,2), (5,1)
Prob (9) = 4/3 > (3,6), (4,5), (5,4), (6,3)
So Prob (6 or 9) = 9/36 = 1/4
Prob (Loss) = 1 – 11/36 – 1/4 = 16/36 = 4/9
Expected Value = SUM [Prob(x)*₱X]
E(x) = (11/36) *800 + (1/4) *500 - (4/9) *-120
E(x) = 244.44 + 125 – 53.33
E(x) = 316.11
Therefore, the expectation of the game is to win a P316.11.
3. An insurance company insures a house worth P4,200,000 for an annual premium of P40,00. If
the company figures that the probability of the house being burned down by fire is 0.0075, what
will be the company’s expected profit?

Solution:
P (of being burned down by fire) = 0.0075 Worth = P4,200,000
P (of not being burned down by fire) = 0.0925 Annual Premium = P40,000

X P(X)
Profit P40,000 0.925
Loss P-4,160,000 0.0075

E(x) = (P40,000) (0.0925) – (P4,160,000) (0.0075)

E(x) = P3,700 – P31,200
E(x) = P27,500

Thus, the expected profit of an insurance company is P27,500.