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An insurance company has written 52 policies of $50,000, 477 of $25,000, and 918 of $10,000
on people of age 20. If the probability that a person will die at age 20 is 0.001, how much can
the company expect to pay during the year the policies were written?
(HELPP)

Respuesta :

The amount of money that the company can expect to pay during the year the policies were written is; $25005

How to find the expected Value?

The probability that a person will die at age 20 = 0.001

Revenue from 52 policies = 52 * $75,000 = $3,900,000

Revenue from 477 policies = 477 * $25,000 = $11,925,000

Revenue from 918 policies = 918 * $10,000 = $9,180,000

Total revenue from all policies = $3,900,000 + $11,925,000 + $9,180,000

Total Revenue from all Policies = $25,005,000

Expected amount to pay out during the year the policies were written =  $25,005,000* 0.001 = $25,005

Thus, the company can expect to pay out $45,000 over the year after the policies were written.

Read more about Expected Value at; https://brainly.com/question/19168423

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