A health insurance company that provides insurance against death has a previous year's reserve of $2,000. Calculate the probability that it will be solvent for the entire year knowing that 100 people use the company, who pay a premium of $100 at the beginning of the year, the probability of dying during the year is 0.01, and the benefit paid is $5000. To what amount can the premium be reduced so that the above probability does not fall below 80%.?
A health insurance company that provides insurance against death has a previous year's reserve of $2,000. Calculate the probability that it will be solvent for the entire year knowing that 100 people use the company, who pay a premium of $100 at the beginning of the year, the probability of dying during the year is 0.01, and the benefit paid is $5000. To what amount can the premium be reduced so that the above probability does not fall below 80%.?
Chapter8: Sequences, Series,and Probability
Section8.7: Probability
Problem 11ECP: A manufacturer has determined that a machine averages one faulty unit for every 500 it produces....
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A health insurance company that provides insurance against death has a previous year's reserve of $2,000. Calculate the
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