You're a small insurance company that insures 5000 people. Let's say that 1 house will catch on fire per year, so the probability of a house catching on fire is (1/5000). Therefore, the probability of a house NOT catching on fire is (4999/5000). If a house catches on fire, you have to pay $200,000. If every person pays $25 monthly, how much profit will your business make? $259.94 $1,299,700 $75,000 $3,673

College Algebra
10th Edition
ISBN:9781337282291
Author:Ron Larson
Publisher:Ron Larson
Chapter8: Sequences, Series,and Probability
Section: Chapter Questions
Problem 41CT: On a game show, a contestant is given the digits 3, 4, and 5 to arrange in the proper order to form...
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You're a small insurance company that insures 5000 people. Let's say that 1 house
will catch on fire per year, so the probability of a house catching on fire is (1/5000).
Therefore, the probability of a house NOT catching on fire is (4999/5000). If a house
catches on fire, you have to pay $200,000. If every person pays $25 monthly, how
much profit will your business make?
$259.94
$1,299,700
$75,000
$3,673
Transcribed Image Text:You're a small insurance company that insures 5000 people. Let's say that 1 house will catch on fire per year, so the probability of a house catching on fire is (1/5000). Therefore, the probability of a house NOT catching on fire is (4999/5000). If a house catches on fire, you have to pay $200,000. If every person pays $25 monthly, how much profit will your business make? $259.94 $1,299,700 $75,000 $3,673
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