Reader's Digest ran a sweepstakes in which prizes were listed along with the chances of winning: $1,000,000

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Reader's Digest ran a sweepstakes in which prizes were listed along with the chances of winning: $1,000,000 (1 chance in 90,000,000), $100,000 (1 chance in 110,000,000), $25,000 (1 chance in 110,000,000), $5,000 (1 chance in 36,667,000), and $2,500 (1 chance in 27,500,000).
a. Assuming that there is no cost to enter the sweepstakes, find the expected value of the amount won for one entry.
b. Find the expected value if the cost of entering this sweepstakes is the cost of a postage stamp. Is it worth entering this contest?
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Related Book For  book-img-for-question

Statistical Reasoning for Everyday Life

ISBN: 978-0321817624

4th edition

Authors: Jeff Bennett, Bill Briggs, Mario F. Triola

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