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zimovet [89]
3 years ago
15

The probability that an 80-year-old male in the U.S. will die within one year is approximately 0.069941. If an insurance company

sells a one-year, $12,000 life insurance policy to such a person for $495, what is the company's expectation
Mathematics
1 answer:
skad [1K]3 years ago
7 0

The company's expectation is $486.26.

Since the probability that an 80-year-old male in the U.S. will die within one year is approximately 0.069941, to determine, if an insurance company sells a one-year, $ 12,000 life insurance policy to such a person for $ 495, what is the company's expectation, the following calculation must be performed:

  • (12000 x 0.069941 / 100) + (495 x (100 - 0.069941) / 100) = X
  • -8.39292 + 494.65379205 = X
  • 486.26 = X

Therefore, the company's expectation is $486.26.

Learn more about maths in brainly.com/question/3554632

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