SOLUTION: Your friend tells you that you need to buy a lottery ticket (costs only $2) with the jackpot of 20 million dollars, because even with the low chances of 1 in 15,890,700 the expecte

Question 1058079: Your friend tells you that you need to buy a lottery ticket (costs only $2) with the jackpot of 20 million dollars, because even with the low chances of 1 in 15,890,700 the expected value of this lottery is rather high. What is the expected value of this lottery?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Your friend tells you that you need to buy a lottery ticket (costs only $2) with the jackpot of 20 million dollars, because even with the low chances of 1 in 15,890,700 the expected value of this lottery is rather high. What is the expected value of this lottery?
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Random "winnings" ..... 20x10^6......-2
Probabilities:: ..... 15890700^-1...15,980699/15980700
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Expected "winnings"::[20x10^6 - 2(15890699)]/15890700 = -74 cents
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He can expect to lose 74 cents on each ticket he buys.
Cheers,
Stan H.
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