Math  /  Data & Statistics

QuestionSuppose that a life insurance company insures 510040 -year-old people in a given year. (Assume a death rate of 6 per 1000 people.) The cost of the premium is $200\$ 200 per year, and the death benefit is $55,000\$ 55,000. How much can the company expect to gain (or lose) in a year?
The insurance company can expect a(n)$a(n) \$ \square \square (Type a whole number)

Studdy Solution
Calculate the expected gain or loss:
Expected gain/loss=Total premium incomeTotal expected payout\text{Expected gain/loss} = \text{Total premium income} - \text{Total expected payout}
Expected gain/loss=102,000,000168,300,000=66,300,000\text{Expected gain/loss} = 102,000,000 - 168,300,000 = -66,300,000
The insurance company can expect a loss of:
66,300,000 \boxed{66,300,000}

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