Do Homework-Stephanie Holbert Google Chrome Secure https://www.mathxl.com/St 98c

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Do Homework-Stephanie Holbert Google Chrome Secure https://www.mathxl.com/St 98centerwin-y Math 1324-340 Stephanie Holbert Homework: h25 (8.5) Score: 0 of 1 pt Bus Econ 8.5.31 An insurance company has written 50 policies for $90,000, 100 policies for $35,000, and 250 policies for $7500 for people of age 20. If experience shows that the 12 of 14 (1 complete) HW Score: 0%, 0 of 1 Question Help probability that a person will die at age 20 is 0.0014, how much can the company expect to pay out during the year the policies were written? The company can expect to pay out Sover the year after the policies were written Type an integer or a decimal.)

Explanation / Answer

The company will payout if the insurance holder dies. Therefore, the expected amount to be paid out will be a function of the porbability of a death, the number of policies sold and value of each policy

Hence, the total amount company expects to pay out is
= P( death( sum of money insured for)
= 0014*($90000*50 + 100*$35000+250*$7500)
= $13825

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