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lesya692 [45]
3 years ago
11

Kyle has to make a decision about his health insurance. Under one plan, the monthly cost of insurance is $15, but if he visits a

doctor, he has to pay $50 for an office visit.
Kyle estimates that he has a 0.05 probability of needing to visit a doctor in any given month.

What is the expected monthly value of this plan for Kyle?
Mathematics
2 answers:
tester [92]3 years ago
8 0

100 - 0.05 = 0.95

Expected monthly cost =

Monthly cost x 0.95 + office visit x 0.05

15 x 0.95 + 50 x 0.05

14.25 + 2.50 = $16.75

cupoosta [38]3 years ago
5 0

Answer:

The expected monthly cost value should be 17.50.

Step-by-step explanation:

15 * 0.95 + (15 + 50)*0.05 = 17.5

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