document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=433294>Question 433294</A>: <I><SPAN STYLE=\"word-break: break-all;\"> An insurance company will insure a $240,000 home for its total value for an annual premium of $600.  If the company spends $30 per year to service such a policy, the probability of total loss for such a home in a given year is .001 and you assume either total loss or no loss will occur, what is the company's expected annual gain (or profit) on each such policy.  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #300387 by </B><A HREF=/tutors/aboutme.mpl?userid=jorel1380><B>jorel1380(3719)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=jorel1380><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=jorel1380><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=300387\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Assuming the home is a total loss in a disaster, the company's expected cost is:<BR>\n" );
document.write( ".001 X 240000=$240<BR>\n" );
document.write( "----------------<BR>\n" );
document.write( "Since the company spends $30 a year to service the policy, it's total costs are $270.  The annual premium is $600, so 600-270=$330 is the company's total annual expected profit. </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );