Concept explainers
a.
To complete: The provided table.
a.
Explanation of Solution
Given:
A 21 years old male that pays $100000, if the insured dies within the next 5 year. And the amount that company earn is 250 per years.
Formula used:
The formula to compute the profit is:
Calculation:
Consider that n is defined as the number of years.
Each year company will earn,
For 1 year,
For 2 year,
For 3 year,
For 4 year,
For 5 year,
For more than 5 year,
Thus, the complete table is:
Age of death | 21 | 22 | 23 | 24 | 25 | 26 or more |
Profit | -$99,750 | -$99,500 | -$99,250 | -$99,000 | -$98,750 | $1250 |
b.
To compute: The missing probabilities.
b.
Explanation of Solution
Calculation:
By using property of probabilities,
The missing probabilities values, can be calculated as;
Thus, the required probability is 0.99058.
c.
To compute: The mean of Y .
c.
Answer to Problem 14E
The mean of Y is 303.3525.
Explanation of Solution
Calculation:
The mean of Y can be computed as:
Thus, the required mean is 303.3525.
Chapter 6 Solutions
The Practice of Statistics for AP - 4th Edition
Additional Math Textbook Solutions
Introductory Statistics
Intro Stats
Elementary Statistics
Statistics: The Art and Science of Learning from Data (4th Edition)
Essentials of Statistics (6th Edition)
Elementary Statistics Using Excel (6th Edition)
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