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Calculus Homework Help

label Calculus
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1 - A 28-year-old man pays $125 for a one-year life insurance policy with coverage of $140,000. If the probability that he will live through the year is 0.9994, to the nearest dollar, what is the man’s expected value for the insurance policy?

2 -

Apr 9th, 2015

Since the man has a 0.9994 probability of living, the expected value of his life insurance policy is only

(1 - 0.9994)(140,000) = $84

If you subtract the amount of money he already paid for the policy, $125, then he's actually lost money.

Apr 9th, 2015

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Apr 9th, 2015
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Apr 9th, 2015
Sep 25th, 2017
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