
Dibyendu D. answered 02/25/20
More than 2 years of experience in teaching SAT/ACT/GRE/GMAT Math
Your second approach is correct. That is
P(A ⋃ B)
= P(A) + P(B) - P(A ⋂ B)
= 0.5 + 0.4 - 0
= 0.9
In the first approach you are assuming Ac (Tom will NOT win the prize) and Bc (John will NOT win the prize) to be independent of each other but this assumption is false i.e. P(Ac ⋂ Bc) ≠ P(Ac) * P(Bc)
1 - P(Neither of them will win the prize)
= 1 - P(Ac ⋂ Bc)
= 1 - P((A ⋃ B)c)
= 1 - [1 - P(A ⋃ B)]
= P(A ⋃ B)