Question

6. A 35-year-old woman purchases a $100,000 term life insurance
policy for an annual payment of $360. Based on a period life table
for the U.S. government, the probability that she will survive the
year is 0.999057. Find the expected value of the policy for the
insurance company. **need a step by step description via
excel**

Answer #1

i am denoting gain of the company by +sign and loss by - sign.

*the necessary
probability distribution table be:-*

X (in $) |
P(x) |

360-100000 = -99640 | (1-0.999057) = 0.000943 |

360 | 0.999057 |

**the expected
value of the policy for the insurance company
be:-**

**the company
will expect a gain of $ 265.7**

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