Reader's Digest ran a sweepstakes in which prizes were listed along with 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). Assuming that there is no cost of entering the sweepstakes, find the expected value of the amount won for one entry. If the cost of entering the sweepstakes is the cost of a postage stamp, is it worth entering the contest?

Question

Reader's Digest ran a sweepstakes in which prizes were listed along with 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). Assuming that there is no cost of entering the sweepstakes, find the expected value of the amount won for one entry. If the cost of entering the sweepstakes is the cost of a postage stamp, is it worth entering the contest?

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The Answer of Reader's Digest ran a sweepstakes in which prizes were listed along with 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). Assuming that there is no cost of entering the sweepstakes, find the expected value of the amount won for one entry. If the cost of entering the sweepstakes is the cost of a postage stamp, is it worth entering the contest?

Reader's Digest Ran a Sweepstakes in Which Prizes Were Listed