document.write( "Question 1193160: 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, $14,000 life insurance policy to such a person for $415, what is the company's expectation? \n" ); document.write( "

Algebra.Com's Answer #825164 by ikleyn(52781) $\"\"$ $\"About$

You can put this solution on YOUR website!
.
\n" ); document.write( "The probability that an 80-year-old male in the U.S. will die within one year is approximately 0.069941.
\n" ); document.write( "If an insurance company sells a one-year, $14,000 life insurance policy to such a person for $415,
\n" ); document.write( "what is the company's expectation?
\n" ); document.write( "~~~~~~~~~~~~~~\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "

\r\n" );
document.write( "By selling such life insurance, the company gets $415 from each customer.\r\n" );
document.write( "\r\n" );
document.write( "\r\n" );
document.write( "The company pays 14000*0.069941 = 979.17 to each customer, in average.\r\n" );
document.write( "\r\n" );
document.write( "\r\n" );
document.write( "\r\n" );
document.write( "The company expectation is\r\n" );
document.write( "\r\n" );
document.write( "      (415 - 14000*0.069941) = -564.17  dollars.     ANSWER\r\n" );
document.write( "\r\n" );
document.write( "\r\n" );
document.write( "\r\n" );
document.write( "Notice the negative sign before this number.  It means that the company loses $564.17, in average, with each customer\r\n" );
document.write( "\r\n" );
document.write( "    (which is, definitely, bad business).\r\n" );
document.write( "

\r
\n" ); document.write( "\n" ); document.write( "Solved.\r
\n" ); document.write( "
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( " \n" ); document.write( "

\n" );