Well, for those of you who can't do maths and still want to place bets, that formula above could be explained like this:
The earlier you bet, the more your bet "counts" (10k placed right now nets more than 10k placed in the finals). Also, the higher amount you bet, the more money you'll win, if you win. If a lot of people bet on the guy you bet on, your profits might be a bit less (if the other people bet 1 million on the guy you bet on, your measly 10k probably won't be that much). If you bet on someone who nobody else placed a bet on, however, might net you a lot later, if you win. Of course, your profits is dependent on the tc people have lost in this event.
Hope that clears it up.

suo adds:
"If you win, you will win a percentage of 80% of the total pot. This percentage will be given by a weight between all other winners, and that weight can be calculated by 2^n*b, where n is the number of rounds before the final you bet, and b is the amount you bet."