Question 1099547: A 37-year-old woman purchases a $100,000 term life insurance policy for an annual payment of $390. Based on a period life table for the U.S. government, the probability that she will survive the year is 0.999052. Find the expected value of the policy for the insurance company. Round to two decimal places.
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! A 37-year-old woman purchases a $100,000 term life insurance policy for an annual payment of $390. Based on a period life table for the U.S. government, the probability that she will survive the year is 0.999052. Find the expected value of the policy for the insurance company. Round to two decimal places.
-------
Random Co gains::..-99,610.......... 390
Probabilities::......0.000948 ......0.999052
---------------------------------------------------
E(x) = -94.43 + 389.63 = $295.20
----------------
Cheers,
Stan H.
-----------
|
|
|
