A lottary has a million dollar first prizes, a twenty five thousand dollar second prizes, five of thousand dollar third prizes. If a ticket cost 2 dollar, what is the expected profit per ticket?

Question

valpey · Answer

I'm sure you mean "has a million dollar first prize,..."

Expected profit will be $1M * Probability of winning first + $25K * Probability of winning second + $1K * Probability of winning third - $2 (price of ticket). Usually, the answer will be negative. We need to know something about the chance of winning.

anonymous · Answer

chance of winning is 7/2million

valpey · Answer

So the chance of winning first is 1:2,000,000,
 the chance of winning second is 1:2,000,000,
and the chance of winning third is 5:2,000,000?

valpey · Answer

If so, then Expected Profit is:$$\frac{$1,000,000}{2,000,000}+\frac{$25,000}{2,000,000}+\frac{5*$1,000}{2,000,000}-$2$$

anonymous · Answer

Yey! its right but it should be positive so I think we can sutract the ratio from $2
Many many Thanx