Winning numbers for the "Straight" DC-4 lottery game are reported on television and in local newspapers. You pay $1.00 and pick a four-digit number. The state chooses a four-digit number at random and pays you $5000 if your number is chosen. What are the expected winnings from a $1.00 Straight DC-4 wager? Please round your final answer to the nearest cent.

Roderick Bradley

Roderick Bradley

Answered question

2022-08-12

Winning numbers for the "Straight" DC-4 lottery game are reported on television and in local newspapers. You pay $1.00 and pick a four-digit number. The state chooses a four-digit number at random and pays you $5000 if your number is chosen. What are the expected winnings from a $1.00 Straight DC-4 wager? Please round your final answer to the nearest cent.

Answer & Explanation

Makai Lang

Makai Lang

Beginner2022-08-13Added 11 answers

The total number of 4 digit number possible using digits from 0 to 9 is
( 10 ) 4 = 10 , 000
The probability that you win $5,000 is 1 10 , 000 = 0.0001
The probability that you lose $1 is 1 0.0001 = 0.9999
The expected winnings from a $1 Straight DC-4 bet = 5 , 000 ( 0.0001 ) 1 ( 0.9999 ) 0.50
the negative sign indicates that you bear a loss of $0.50

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