SOLUTION: A 28-year-old man pays $189 for a one-year life insurance policy with coverage of $100,000. If the probability that he will live through the year is 0.9994, what is the expected va

Algebra ->  Probability-and-statistics -> SOLUTION: A 28-year-old man pays $189 for a one-year life insurance policy with coverage of $100,000. If the probability that he will live through the year is 0.9994, what is the expected va      Log On


   

Question 1126599: A 28-year-old man pays $189 for a one-year life insurance policy with coverage of $100,000. If the probability that he will live through the year is 0.9994, what is the expected value for the insurance policy?
Answer by FrankM(1040) About Me  (Show Source):
You can put this solution on YOUR website!
The chance he'll die is .0006.
.0006 * 100,000 = $60
$60 is the expected payout.