Question

a lottery offers one $1000 prize one $500 and two $50 prizes. one thousand tickets are sold at $2.50. what is the expectived profit

Answer 1

$900

Explanation:

To begin with let us estimate the total cash value of the prices

$1000 x 1= 1000

$500 x 1= 500

$50 x 2= 100

Total = $1600

Now let us calculate the total cost of tickets sold at $2.50 per tickets for 1000 tickets

2.5*1000= $2,500

Assuming worse case that the lottery had winners in all three categories and i.e the total prices given out is $1600

Then the expected profit is = $2,500-$1600= $900