Suppose you buy 1 ticket for $1 out of a lottery of 3000 tickets. If the prize for the one winning
ticket is to be $500, what are your expected winnings?
it depends on the amount of ppl who would win
it depends on the amount of ppl who would win
and
From your data, you have a 1/3000 chance of winning $500 and a 2999/3000 chance of winning nothing.
To calculate your expected winnings in this scenario, you need to calculate the product of the probability of winning and the prize amount, and subtract the cost of the ticket. Here's how you can do it:
1. Calculate the probability of winning:
Given that you have one ticket and there are 3000 tickets in total, the probability of winning is 1/3000.
2. Calculate the expected winnings:
Multiply the probability of winning by the prize amount and subtract the cost of the ticket. In this case:
Expected winnings = (Probability of winning) * (Prize amount) - (Cost of the ticket)
Expected winnings = (1/3000) * ($500) - ($1)
Expected winnings = $500/3000 - $1
Expected winnings = $0.1667 - $1
Expected winnings = -$0.8333
Therefore, your expected winnings in this lottery are -$0.8333. Note that a negative expected value means that, on average, you would lose money by participating in this lottery.