The chance of winning a lottery game is 1 in approximately 24 million. Suppose you buy a $1 lottery ticket in anticipation of winning the $4 million grand prize. Calculate your expected net winnings for this single ticket. Interpret the result.

Answer: The expected net winning for a single ticket = $0.8333

Step-by-step explanation:

The chance of winning a lottery game is 1/24000000

Suppose a $1 lottery ticket is bought in anticipation to win $4000000, the grand price for buying $1 is

4000000*1/24000000

= 1/6

= $0.1667

After paying for $1 for the ticket, the net winning is $0.1667 - $1

= - $0.8333

= - $0.8 (to the nearest tenth)

This means that on the average, you will loose $0.8 for every ticket you buy. The lottery commission makes over $0.8 on every ticket sold.

The fair price of a lottery ticket is $0.17.