How To Calculate Expected Value?

Expected value is like guessing how many jellybeans are in a jar, but instead of just picking one number, you average out all your guesses based on what might happen.

Imagine you have a coin that’s not fair: it lands on heads 70% of the time and tails 30% of the time. Every time it lands on heads, you get 2 candies, and every time it lands on tails, you get 1 candy. You want to know how many candies you can expect to get on average each flip.

First, multiply the number of candies you get for each outcome by its chance of happening:

• Heads: 2 candies × 70% = 1.4 candies
• Tails: 1 candy × 30% = 0.3 candies

Then add those together:

1.4 + 0.3 = 1.7 candies

So, on average, you’ll get 1.7 candies per flip, that’s your expected value.

It’s like knowing how many lollipops you can expect to win from a game at the fair based on how often you’ve won before! Expected value is like guessing how many jellybeans are in a jar, but instead of just picking one number, you average out all your guesses based on what might happen.

Imagine you have a coin that’s not fair: it lands on heads 70% of the time and tails 30% of the time. Every time it lands on heads, you get 2 candies, and every time it lands on tails, you get 1 candy. You want to know how many candies you can expect to get on average each flip.