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Dovator [93]
3 years ago
7

The cost of health insurance is $1,200 per year. The cost of an operation for a dramatic injury is $500,000. The chances of some

one needing such an operation are 47.3% over a twenty year period. From a purely financial point of view, are you better off taking out the insurance or not? Choose the best answer.
Question options: No. The insurance company must make a profit.

Yes. The cost of the insurance is less than the probability cost of the operation

No. The probality of needing the operation is less than 50%.

Yes. Buying insurance is always a good idea.
Mathematics
1 answer:
SIZIF [17.4K]3 years ago
5 0

Answer:

yes. The cost of the insurance is less than the probability cost of the operation

Step-by-step explanation:

yes. The cost of the insurance is less than the probability cost of the operation

The cost of health insurance = $1200

Cost of dramatic injury operation= $500,000

chances of need of operation= 47.3% over a 20 years period

the amount of pay insurance after 20 years= 20\times 1200= 240,00

probable  of cost operation= 0.473*500,00= $236,500

clearly the cost of insurance is less than the probable  cost of operation.

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