Question

PLEASE HELP ME PLEASE
PROBABILITY DISTRIBUTION AND EXPECTED VALUE QUESTION
An online gambling site offers a first prize of $50,000 and two second prizes of $10,000 each for registered users when they place a bet. A random bet will be selected over a 24-hour period. One million bets are received in the contest. Find the expected winnings if you can place one registered bet of $1 in the given period. @amistre64

Answer 1

The average value of the prizes is
(50000 + 10000 + 10000)/3 = $23,333.33
The probability of a loss is (10^6 - 1)/10^6. So the expected loss is
\[-1\times\frac{10^{6}-1}{10^{6}}\]
The probability of a win is 1/10^6. So the expected gain is
\[23333.33\times\frac{1}{10^{6}}\]
The expected winnings is given by
\[\frac{23333.33}{10^{6}}-\frac{10^{6}-1}{10^{6}}=you\ can\ calculate\]
Hint: The expected winnings will be a loss!

Answer 2

PLEASE WAT DOES THE 10^6 MEAN. AND HOW DID YOU GET IT ..@kropot72

Answer 3

secondly how did you get the additional 10,000 in the begiinig of your work?
@kropot72

Answer 4

\[1,000,000=10^{6}\]
One million can also be written as 10^6 in OpenStudy's convention.
There are three prizes, one prize of $50,000 and two prizes of $10,000. the total prize money is 50,000 + 10,000 + 10,000 = $70,000.
$70,000 is divided by three to get the average prize.

Answer 5

please how did u get -1 in the expected loss calculation? @kropot72

Answer 6

The amount of the bet is $1. The $1 is kept by the gambling site, so it is effectively a loss and is given a negative sign.

Answer 7

oh ok,so wat i get from your last calculation should be my answer.?

Answer 8

What answer do you get when you do the calculation?

Answer 9

0.0233 @kropot72

Answer 10

is it right?
@kropot72

Answer 11

The value of the first quotient is
\[\frac{23333.33}{10^{6}}=0.02333333\]
Now you need to subtract the value of the second quotient:
\[0.02333333-\frac{999,999}{1,000,000}=you\ can\ calculate\]
This will give a negative answer as a decimal fraction of a dollar.

Answer 12

-0.9767

Answer 13

@kropot72

Answer 14

Good work! My result was an expected loss of 97.666 cents.

Answer 15

u had no negative ? or i can also choose to write it as how you have written it,..and the question which says find the expected winnings doesnot necessarily mean a profit right??

Answer 16

@kropot72

Answer 17

Sorry for confusing you by expressing the answer as an expected loss. The question asks for the expected winnings, therefore I suggest that you write the answer as either -97.666 cents or as -$0.97666. Your choice might depend on the format provided for your answer.

Answer 18

@payin Please ask if you need more help.

Answer 19

oh ok.i would need to get over the solution a step at a time.

Answer 20

I think that my first posting and the replies to your questions show all the steps. Which steps do you want me to go over?

Answer 21

ive got it perfectly now..thanks

Answer 22

You're welcome :)