document.write( "Question 360605: In a lottery game, one can win $10,000 with probability 0.01 and $1000 with probability 0.05. How much should one pay for a lottery ticket to make the game fair? \r
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Algebra.Com's Answer #257309 by Edwin McCravy(20055) $\"\"$ $\"About$

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In a lottery game, one can win $10,000 with probability 0.01 and $1000 with probability 0.05. How much should one pay for a lottery ticket to make the game fair?
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document.write( "We calculate the expectation:\r\n" );
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document.write( "Winnings   Probability   Winning×probability\r\n" );
document.write( "$10000        0.01            $100\r\n" );
document.write( " $1000        0.05             $50\r\n" );
document.write( "                         -------------------\r\n" );
document.write( "            Expectation =     $150\r\n" );
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document.write( "So on the average if someone entered this same lottery free many times, \r\n" );
document.write( "they would expect to average winning $150 per time they entered.\r\n" );
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document.write( "So for the game to be fair, one would have to expect $0, and thus one\r\n" );
document.write( "should pay $150 per ticket.\r\n" );
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document.write( "Edwin

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