STA-225-40 X McGraw-Hill Education C X McGraw-Hill Connect MEX onnectmath.com/al

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STA-225-40 X McGraw-Hill Education C X McGraw-Hill Connect MEX onnectmath.com/alekscgi/ /Islexe/1o-?gNslkr7)8P3jH-NduzhcvzFZxntTwqmDkUqn29 1 doAw Exam #2 Previous 21 22 23 24 25 Question 22 of 25 (4 points) A 37-year-old woman purchases a $100,000 term life insurance policy for an annual payment of $620. 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 for currency problems The expected value of the poliey for the insurance company is s

Explanation / Answer

Ans:

Probability of survival=0.999052

Probability of death=1-0.999052=0.000948

Expected value=annual payment-expected amount paid in case of death

=620-100,000*0.000948

=620-94.8

=525.20

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