Answer:
$0.79 profit per person who buys a policy
Step-by-step explanation:
For every 10 million people who buy a policy the expected outcome is
<em>$(21*100,000) = $2,100,000 (21 deaths out of 10 million)</em>
the expected income is
$10,000,000 ($1 per sold policy)
So the <em>expected profit </em>is
$10,000,000 - $2,100,000 = $7,900,000
To obtain how much the insurance company can make for each policy that it sells, we <em>cross multiply
</em>
10,000,000 people ---------> $7,900,000 profit
1 person -----------------------> x
and
10,000,000=7,900,000/x and x = $0.79 profit per person who buys a policy
