Answer to Question #8451 in Statistics and Probability for Rita Hicks
A 35 year old woman purchases a $100,000 term life insurance policy for an annual payment of $360. Based on a period life table for the U.S. government , the probability that she will survive the year is 0.999057. Find the expected value of the policy for the insurance company.
could you show me how this is done.
1-0.999057 = 0.000943*100.000 = $94.3
Thus, their profit for the first year is
$360 - $94.3 = $265.7.
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