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An insurance policy sells for $1200. Based on past data, an average of 1 in 100 policyholders will file a $20,000 claim, an average of 1 in 250 policyholders will file a $40,000 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 30,000 policies, what is the expected profit or loss? The expected value is $ (Simplify your answer.) C

An insurance policy sells for $1200. Based on past data, an average of 1 in 100 policyholders will file a $20,000 claim, an average of 1 in 250 policyholders will file a $40,000 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 30,000 policies, what is the expected profit or loss? The expected value is $ (Simplify your answer.) C

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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An insurance policy sells for $1200. Based on past data, an average of 1 in 100 policyholders will file a $20,000 claim, an average of 1 in 250 policyholders will file a $40,000 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 30,000 policies, what is the expected profit or loss? The expected value is $ (Simplify your answer.) C
Transcribed Image Text:An insurance policy sells for $1200. Based on past data, an average of 1 in 100 policyholders will file a $20,000 claim, an average of 1 in 250 policyholders will file a $40,000 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 30,000 policies, what is the expected profit or loss? The expected value is $ (Simplify your answer.) C
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