document.write( "Question 1155841: Suppose a life insurance company sells a $300 comma 000 one-year term life insurance policy to a 24-year-old female for $220. The probability that the female survives the year is 0.999488. Compute and interpret the expected value of this policy to the insurance company. \n" ); document.write( "

Algebra.Com's Answer #778534 by ikleyn(52792) $\"\"$ $\"About$

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document.write( "Expected value = 220 - (1-0.999488)*300,000 = 66.4 dollars.    ANSWER\r\n" );
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document.write( "$220 is the amount the company get from selling one insurance policy.\r\n" );
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document.write( "(1-0.999488)*300,000 is the amount they pay, in average.\r\n" );
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