formula to use for finding expected value of investment?

[serenity26]

okay i am sorry for so many postings but i am in a pickle as i can't seem to figure out which formula goes where. and my book is of no help. here is my dilema.

there is a probabilty chance of 0.7 of me earning $75000 and a 0.03 chance of me breaking even on an investment. what would be my expected value?

 

[tkhunny]

It is impossible to have a textbook published without this information.

\(\displaystyle E[x]\;=\;\sum{(x*pr(x))}\)

Surely you have seen it!

In your case:

75000*0.7 + 0*0.03 + (something)*0.27 = Expected Value

Unfortunately, you have not specified the entire distribution. Maybe just a typo?

75000*0.7 + 0*0.3 = Expected Value