There were 400 000 tickets sold for a lottery, and each ticket cost $1....

[sk8erboi]

hi!! my finals are tomorrow and i don't have a clue how to do this question, and google and khan academy couldnt help me. here is the question:

There were 400 000 tickets sold for a lottery, and each ticket cost $1. There were four prize categories, and the number of winning tickets for each category is shown below. If Alfred purchased one ticket, what is his expected gain/loss?

prize money	number of tickets
$40 000	1
$4 000	5
$400	120
$5	4000

the answer key says the answer to this question (alfred's gain/loss) is -0.68.
if anyone can solve this and show me the steps how, it would be greatly appreciated thanks !!!

 

[lev888]

You need to use the formula for the expected value (or mathematical expectation). Look up "expected value lottery" on youtube. E.g. https://www.youtube.com/watch?v=vueXEAwNn6c.

 

[j-astron]

Once you've followed lev888's advice and figured out what an expectation value is, you're going to need to figure out the probability of winning each prize, in order to compute that expectation value.

Hint: If 400,000 tickets exist in total, and only one of them is a winning ticket for the grand prize ($40k), then what is the probability of winning the grand prize?