Concept explainers
In Exercises 1-5, we computed the
We want to compute the conditional probability
Using the definition of probability, we have
You computed P (Alive at age 20) in Exercise 2. Now we need to compute P(Alive at age 100 and Alive at age 20). The key is to realize that anyone who is awe at age 100 was also alive at age 20. Therefore,
Therefore,
In general: for
A life insurance company sells term insurance policies These policies pay $100,000 if the policyholder dies before age 70, but pay nothing if a person is still alive at age 70. If a person buys a policy at age 40, what is the probability that the insurance company does not have to pay?
Want to see the full answer?
Check out a sample textbook solutionChapter 5 Solutions
Elementary Statistics ( 3rd International Edition ) Isbn:9781260092561
- MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons IncProbability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage LearningStatistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning
- Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSONThe Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. FreemanIntroduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman