expected wins:
.15(1) = .15
.05(5) = .25
.01(50) = .50
1/10000(500) = .05
total expected wins on one ticket = .95
That is, if they charged 95 cents for a ticket , everybody would break even in the long run.
So to make a 40% profit, they should charge
.95(1.4) or $ 1.33
In a local lottery, there is a 15% chance of winning $1, a 5% chance of winning $5, a 1 in 100 chance of winning $50 and a 1 in 10 000 chance of winning $500.
What is the expected value of your winnings in this lottery?
How much does the lottery need to charge for each ticket to make a profit of 40% on each ticket sold.
Having trouble on even getting started here, could you give me a push in the right direction?
1 answer
1 answer