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 Post subject: LotteryPosted: Wed, 20 Feb 2008 02:43:43 UTC
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Joined: Wed, 20 Feb 2008 02:32:29 UTC
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Hey! i'm having a lot of problems with one of my assignment question. I guess the major problem i have is that i don't really understand what it wants me to calculate =P hopefully someone can help.

Question:
Most states offer weekly lotteries to generate revenue for the state. Despite the long odds of winning, residents continue to gamble on lottery every week. Chance of wining at the Floridaâ€™s pick 6 Lotto game is 1 in 23 million. Suppose you buy a $1 lottery ticket in anticipation of winning the$7 million grand prize Calculate your expected net winning. Interpret the results.

Thanks!!

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 Post subject: Posted: Wed, 20 Feb 2008 04:58:45 UTC
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Expected net loss = $7,000,000*(1/23,000,000) -$1*(22,999,999/23,000,000)

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 Post subject: Posted: Wed, 20 Feb 2008 07:24:37 UTC
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Joined: Tue, 19 Feb 2008 20:16:56 UTC
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sean39: can you please explain how you came to this conclusion?

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 Post subject: Posted: Wed, 20 Feb 2008 12:27:13 UTC
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Joined: Tue, 13 Mar 2007 09:00:13 UTC
Posts: 556
I like to think of these questions as the following:
When are the odds as good as the payoff?

Here we stand to win 7mil instead of 23mil.

If the payoff was 23mil that would at least make the odds equal.

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 Post subject: Posted: Wed, 20 Feb 2008 12:45:53 UTC
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Joined: Wed, 20 Feb 2008 02:32:29 UTC
Posts: 4
thnx for the help! but then i don't get why u need to multiply the $1 by (22,999,999/23,000,000). Can you please explain that? Top  Post subject: Re: LotteryPosted: Wed, 20 Feb 2008 13:44:54 UTC  Member of the 'S.O.S. Math' Hall of Fame Joined: Mon, 19 May 2003 19:55:19 UTC Posts: 8241 Location: Lexington, MA Hello, xellenx! Quote: Chance of winning at the Floridaâ€™s Pick6 Lotto game is 1 in 23 million. Suppose you buy a$ 1 lottery ticket in anticipation of winning the \$7 million grand prize.
Calculate your expected net winning. Interpret the results.

Here is a rather primtive approach to an expectation problem . . .

Suppose you buy all tickets. . This costs you: .

. . In return, you will win the grand prize: .

Hence, your average winnings is: .

If you play this game regularly,
. . you can expect to lose an average of 70 cents per play.

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