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yanalaym [24]
2 years ago
7

Jacob is looking to buy some car insurance and is reviewing different policies from several different agencies. The first policy

he sees costs$750 for the upcoming year and is worth $10000 if he gets in a collision.After doing some research, he estimates that he has a 8% of getting in acar accident for that year. What is the expected value of buying this insurance policy
Business
1 answer:
Lostsunrise [7]2 years ago
5 0

The expected value of buying this insurance policy is $50.

The expected value of buying the insurance policy is the weighted average of probabilities of the cost of the insurance and the cover if Jacob gets into an accident.

If Jacob gets into an accident and is covered, his payout will be:

= benefit - cost

= 10,000 - 750

= $9,250

The probability of this happening is 8%.

If Jacob does not get into an accident he would lose the $750 he paid in insurance premiums. The probability of this happening is:

= 100% - 8%

= 92%

The expected value of the insurance is:

= (probability of accident * payout if there is an accident) + (probability of no accident * payout if there is no accident)

= (8% * 9,250) + (92% * -750)

= $50

<em>More information on expected value can be found at brainly.com/question/17069001.</em>

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Answer:

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Explanation:

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Hello. My name is Eric! I'm looking for some advice on what type of investments to consider. I'm 53, my kids are through college
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Indirect labor includes: (You may select more than one answer. Single click the box with the question mark to produce a check ma
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Complete Question:

Options:

a) labor of employees working directly on the product

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Answer:

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Explanation:

Indirect labor is the cost of labor for all those who contribute to the production of a product, but  indirectly.  These include the labor costs of equipment and factory maintenance employees, factory clerical staff, supervisors, and managers, product inspectors and quality controllers, etc.  The determining factor is the level of involvement: direct or indirect or outside production.  If it is direct or outside production, it is not part of indirect labor.

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A. Construct an amortization schedule for the $300,000 loan with a 2.2% interest rate compounded monthly. The loan will be paid
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Answer:

since there is not enough room here, I prepared two amortization schedules on an excel spreadsheet and I attached them

Explanation:

in order to determine the monthly payment, we can use the formula to calculate present value of an annuity:

PV = annuity payment x annuity factor

annuity payment = PV / annuity factor

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I used an annuity calculator to determine the annuity factor

annuity payment = $300,000 / 153.1964438 = $1,958.27

we use the same formulas for the second question:

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I used an annuity calculator to determine the annuity factor

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7 0
3 years ago
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