The article How to Calculate Contingency Reserves Using Expected Value Method originally appeared on Fool.com. Try any of our Foolish newsletter services free for 30 days .

In essence, expected value looks at how much you're expected to earn by playing a game of chance. Conveniently, Powerball publishes their probabilities so we can easily calculate the chance.

Calculate the expected annual return of your portfolio in Microsoft Excel by using the value and expected rate of return of each investment.