Answered: Jim is a 60-year-old Anglo male in…

Name: Jim is a 60-year-old Anglo male in reasonably good health. He wants to
Uploaded: 2024-03-20T07:06:41.000Z
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Description: Jim is a 60-year-old Anglo male in reasonably good health. He wants to take out a $50,000 term (i.e., straight death benefit) life insurance policy until he is 65. The policy will expire on his 65th birthday. The probability of death in a given year

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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x = age	60	61	62	63	64
P(death at this age)	0.01012	0.01423	0.01711	0.02071	0.02209

(a)

What is the probability that Jim will die in his 60th year? (Enter a number. Enter your answer to five decimal places.)

Using this probability and the $50,000 death benefit, what is the expected cost to Big Rock Insurance (in dollars)? (Enter a number. Round your answer to two decimal places.)
$

(b)

What is the expected cost to Big Rock Insurance for years 61, 62, 63, and 64 (in dollars)? (For each answer, enter a number. Round your answers to two decimal places.)
year 61 $
year 62 $
year 63 $
year 64 $

What would be the total expected cost to Big Rock Insurance over the years 60 through 64 (in dollars)? (Enter a number. Round your answer to two decimal places.)
$

(c)

If Big Rock Insurance wants to make a profit of $700 above the expected total cost paid out for Jim's death, how much should it charge for the policy (in dollars)? (Enter a number. Round your answer to two decimal places.)
$

(d)

If Big Rock Insurance Company charges $5000 for the policy, how much profit does the company expect to make (in dollars)? (Enter a number. Round your answer to two decimal places.)
$

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