Expected Value Calculator

An online expected value calculator helps you to determine the expected value of the number or set of numbers corresponding to the probability of the numbers. The expected value or mean is the predicting value for using at any point in the future. Read the content to exactly know about the expected value formula, manual calculations and much more!

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Also, you can try our online mean calculator that helps you to determine the mean, mode, median & the range of the data set.

What is the Expected Value Formula?

The formula used by this online calculator for the calculations is as follows

E(X) = μX = x1P(x1) + x2P(x2) + … + xnP(xn)

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How to Find Expected Value (Step-by-Step):

The formula is discussed earlier; here we have an example for better understanding of the concept.

Example:

If the numbers are 4,8,6,3 and the probability of each value is 0.1, 0.5, 0.04, and 0.36 respectively. Find the expected value ?

Solution:

The formula is:

E(X) = μX = x1P(x1) + x2P(x2) + … + xnP(xn)

Here,

X1= 4 & P(x1) = 0.1

X2= 8 & P(x2) = 0.5

X3= 6 & P(x3) = 0.04

X4= 3 & P(x4) = 0.36

So,

E(X) = (4)(0.1) + (8)(0.5) + (6)(0.04) + (3)(0.36)

E(X) = 0.4 + 4 + 0.24 + 1.08

E(X) = 5.72

You can use our online expected value calculator to verify the example that uses the above formula for the calculation & to answer the question of how to calculate expected value.

As it measures the expected outcome of probability of set of number so, the individual probabilities must collectively add up to 1 or 100%. Also, none of any probability can be greater than 1. Because the probability of any event happening cannot be greater than 100%. That’s why, the expected value calculator display an error message if any event or collectively probability is greater than 1.

Understanding the Expected Value (EV):

There is a technique of scenario analysis for calculating the EV of an investment. It uses the probabilities with different models to examine the possible outcomes for the purposed investment. The EV is also known as expectation, mean or first moment. It can be calculated for single variables (discrete or continuous) & multiple variables (discrete or continuous).

How to Use the Online Expected Value Calculator:

The calculations become very easy with this assistive tool. Just stick to the following points for the accurate results:

Inputs:

• First of all, enter the values separated with commas for which you want to do the calculations.
• Very next, enter the probability of each number in the designated field.
• Lastly, hit the calculate button.

Outputs:

Once you fill in the fields, the calculator shows:

• Expected value.
• Expected value table.
• Step-by-step calculation.

Advantages & Disadvantages of Expected value:

Advantages:

• Reduces information to one answer.
• Long term investment of variable.
• Measure central of probability distribution.
• Expectations of future outcomes.

Disadvantages:

• Risk rate is high.
• Difficult to determine probabilities.
• Unacceptable for one-off decisions.

End-Note:

In Statistics & Probability for data analysis, expected value is of higher demand & value. When it comes to calculate it, then try the online expected value calculator that helps you to determine the expected value or mean of the given data set.

References:

From the authorized source of Wikipedia : Definition & formula

From the source of Investopedia : General understanding of EV

From the source of kfknowledgebank : Pros & Cons of expected value