40% ChanceWin 0 $60% ChanceWin 100 $ I am willing to pay at most                                              $ to play the lottery.

Question

40% ChanceWin 0 $60% ChanceWin 100 $ I am willing to pay at most                                              $ to play the lottery.
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Solution 1

The amount you should be willing to pay to play the lottery can be calculated using the concept of Expected Value in probability.

Here's how to calculate it:

  1. Multiply each outcome by the chance of it happening.
    • For the $0 win, it's 0 * 0.40 = $0.
    • For the $100 win, it's 100 * 0.60 = Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv

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