Solve the problem.
-An insurance company has written 62 policies of $50,000, 455 of $25,000, and 908 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?
A) $2356
B) $23,555
C) $235,550
D) $0

Question

Quizplus · Accepted Answer

The expected payout for each policy is calculated by multiplying the payout amount by the probability of the event (death at age 20) occurring. Therefore, for each policy type, the expected payout is:- For $50,000 policies: $50,000 * 0.001 = $50 per policy. With 62 policies, this totals $50 * 62 = $3,100.- For $25,000 policies: $25,000 * 0.001 = $25 per policy. With 455 policies, this totals $25 * 455 = $11,375.- For $10,000 policies: $10,000 * 0.001 = $10 per policy. With 908 policies, this totals $10 * 908 = $9,080.Adding these totals together gives the expected payout for the year: $3,100 + $11,375 + $9,080 = $23,555.

Solve the Problem. -An Insurance Company Has Written 62 Policies of $50,000, 455