Question

You buy a lottery ticket to a lottery that costs $10 per ticket. There are only 100 tickets available to be sold in this lottery. In this lottery there are one $450 prize, two $110 prizes, and four $25 prizes. Find your expected gain or loss. (Round your answer to two decimal places.)

Answer 1

Answer: The expected loss is $2.3

Explanation:

Total number of tickets to be sold = 100 tickets

one $450 prize, the expected gain = 450 x (1/100)  = $4.5

two $110 prizes, the expected gain = 110 x (2/100) = $2.2

four $25 prizes. the expected gain = 25 x (4/100) = $1

Expected gain (loss) = Total expected gain - Cost of the ticket

                                  = (4.5 + 2.2 + 1 ) - 10

                                  = (2.3)

The expected loss is $2.3

Answer 2

Answer:

$2.3

Explanation:

cost per ticket = $10

Total number of tickets to be sold = 100 tickets

since there are 100 tickets the probability that you would win any of the prize would be:

For the one(1)  $450 prize

 expected gain = 450 x (1/100)  = $4.5

For the two(2) $110 prizes

expected gain = 110 x (2/100) = $2.2

For the four(4) $25 prizes.

 expected gain = 25 x (4/100) = $1

Expected gain (loss) = Total expected gain - Cost of the ticket

= (4.5 + 2.2 + 1 ) - 10 = - 2.3

The expected loss is $2.3