A lottery ticket costs $1 and the prize is $28,000,000. The probability of winning is .000000023. What is the expected value of a ticket?
To calculate the expected value of a lottery ticket, you need to multiply the value of each outcome by its respective probability, and then sum up the results.
In this case, we have:
Value of winning = $28,000,000
Probability of winning = 0.000000023
Value of losing = -$1 (negative value because we pay for the ticket)
Probability of losing = 1 - 0.000000023 = 0.999999977 (since there are only two outcomes - winning or losing)
Now we can calculate the expected value:
Expected value = (Value of winning * Probability of winning) + (Value of losing * Probability of losing)
Expected value = ($28,000,000 * 0.000000023) + (-$1 * 0.999999977)
Expected value ≈ $0.644
Therefore, the expected value of a lottery ticket is approximately $0.644.