Question

One state lottery has 1,200 prizes of $1; 110 prizes of $10; 25 prizes of $70; 5 prizes of $290; 2 prizes of $1,210; and 1 prize of $2,500. Assume that 26,000 lottery tickets are issued and sold for $1. What is the lottery's expected profit per ticket?

Answer 1

Answer: Expected profit is $15,580

Step-by-step explanation:

Expected profit can be calculated by subtracting the total prize money's from the total revenue from the sales of the tickets.

`Expected profit = Total revenue - Total prize money`

`= 26,000 * $1 - (1,200 * $1 + 110 * $10 + 25 * $70 + 5 * $290 + 2 * $1,210 + 1 * $2,500)`

`= $26,000 - ($1,200 + $1,100 + $1,750 + $1,450 + $2,420 + $2,500)`

`= $26,000 - $10,420`

`=$15,580`

Therefore, the expected profit of the lottery is $15,580.