Originally Posted by
jjbrian Peter has probability 1/4 of winning each game. Peter and Paul each bet $100 on each game. They each start with $400 and play until one of them goes broke. What is the probability that Paul goes broke?
Ans: 0.01220
How do you do this problem>?
I used this formula:
Suppose Peter starts with s dollars and Paul starts with t-s dollars. Let P* be the probability that Peter wins all the money. Then
P* = (1 -r^s) /(1-r^t)
where r = q/p (p not equal q).
Attempt:
s = 400 (Given)
t = 800 (from t-400= 400)
p = 1/4 (Given)
q = 3/4 (q=1-p) = (1-1/4)
r = 3 (q/p)