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An insurance policy sells for $1000. Based on past data, an average of 1 in 100 policyholders will file a $15,000 claim, an average of 1 in 200 policyholders will file a $30,000 claim, and an average of 1 in 400 policyholders will file an $80,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss? The expected value is $. (Simplify your answer.) The expected (Simplify your answer.)

An insurance policy sells for $1000. Based on past data, an average of 1 in 100 policyholders will file a $15,000 claim, an average of 1 in 200 policyholders will file a $30,000 claim, and an average of 1 in 400 policyholders will file an $80,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss? The expected value is $. (Simplify your answer.) The expected (Simplify your answer.)

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section: Chapter Questions
Problem 35T
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An insurance policy sells for $1000. Based on past data, an average of 1 in 100 policyholders will file a $15,000 claim, an average of 1 in 200 policyholders will file a $30,000 claim, and an average of 1 in 400 policyholders will file an $80,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss? The expected value is $ (Simplify your answer.) The expected (Simplify your answer.) is $
Transcribed Image Text:An insurance policy sells for $1000. Based on past data, an average of 1 in 100 policyholders will file a $15,000 claim, an average of 1 in 200 policyholders will file a $30,000 claim, and an average of 1 in 400 policyholders will file an $80,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss? The expected value is $ (Simplify your answer.) The expected (Simplify your answer.) is $
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