Sara is aAngloinStatistical Abstract of the United sa reasonably good health. She wants to take out a $50,000 term (that is, straight death benefit) life insurance policy until she is 65. The policy will expire on her 65th birthday. The probability of death in a given year is provided by the Vital Statistics Section of the(116th60x = age616263P(death at this age) 0.00643 0.00938 0.00977 0.00948Sara is applying to Big Rock Insurance Company for her term insurance policy.(a) What is the probability that Sara will die in her 60th year? (Use 5 decimal places.)640.01159Using this probability and the $50,000 death benefit, what is the expected cost to Big Rock Insurance?$(b) Repeat part (a) for ages 61, 62, 63, and 64.Age Expected Cost61 $62$63 $64 $What would be the total expected cost to Big Rock Insurance over the years 60 through 64?$(c) If Big Rock Insurance wants to make a profit of $700 above the expected total cost paid out for Sara's death, how much should it charge for the policy?$(d) If Big Rock Insurance Company charges $5000 for the policy, how much profit does the company expect to make?$

The probability distribution is given as-x=Age6061626364P(Death at this…

Answered: Sara is a 60-year-old Anglo female in…

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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Jim is a 60-year-old male in reasonably good health. He wants to take out a $50,000 term (that is, 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 is provided by the Vital Statistics Section of the Statistical Abstract of the United States (116th edition) X=age 60 61 62 63 64 P(death at this age) 0.01191 0.01292 0.01396 0.01503 0.011613 Jim is applying to Big Rock Insurance Company for his term insurance policy. What is the probability that Jim will die in his 60th year? Using this probability and the $50,000 death benefit, what is the expected cost to Big Rock Insurance? Repeat part (a) for years 61, 62, 63, and 64. What would be the total expected cost to Big Rock Insurance over the years 60 through 64? 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?…
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