document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1026199>Question 1026199</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose you buy a life insurance policy that will cost you $500 and your family will collect $100,000 in the event that you die within one year of the date of the purchase of this policy.<BR>\n" );
document.write( "Study shows that the probability that you die within one year of the date of the purchase of this policy is 0.2%.\r<BR>\n" );
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document.write( "What is your family net earning(x) and Probability of your family net earning?  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #641691 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><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=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=641691\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> you spend 500.\r<BR>\n" );
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document.write( "if you do die within the first year, your family's net earnings will be 100,000 - 500 = 99,500.\r<BR>\n" );
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document.write( "the probability of this occurring is .002.\r<BR>\n" );
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document.write( "that's 1 out of every 500 times, on the average.\r<BR>\n" );
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document.write( "the insurance company expects that approximately 1 out of every 500 families will be able to cash in on this bonanza.\r<BR>\n" );
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document.write( "so, for every 500 families that they sell this policy to, they will have to pay out 100,000 but they will take in 250,000.\r<BR>\n" );
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document.write( "their gross profit is about 150,000 on every 500 families that they sell this policy to.\r<BR>\n" );
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document.write( "their net profit will be something less, because they have expenses to take care of just like any other business.\r<BR>\n" );
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