Mathew buys a single ticket for $8 out of a lottery of 1000 tickets where the prize for the one winning is to be $800. How much is the expected earning per ticket?

Given:

The number of tickets = 1000

Mathew buys a single ticket for $8

Winning price = $800

To find:

The expected earning per ticket.

Solution:

It is given that the total number of tickets is 1000. So, the probability of winning is:

The probability of losing is:

The expected earning per ticket is:

Therefore, the expected earning per ticket is -7.192. Here, negative sign means loss of $7.192.