Jim is a 60-year-old Anglo 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) 0.01030 0.01357 0.01609 0.01981 0.02362
Jim is applying to Big Rock Insurance Company for his term insurance policy.
(a) What is the probability that Jim will die in his 60th year? (Round your answer to five decimal places.)
Using this probability and the $50,000 death benefit, what is the expected cost to Big Rock Insurance?
$
(b) Repeat part (a) for years 61, 62, 63, and 64.
Year Expected Cost
61 $
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 Jim'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?
$

0.01030 ; $515 ; kindly check explanation

Step-by-step explanation:

Given :

x = age 60 61 62 63 64

P(death at this age) 0.01030 0.01357 0.01609 0.01981 0.02362

Death benefit = $50,000

A) P(death at x = 60) = 0.01030

Expected cost at 60;

0.01030 * 50000 = $515

Expected cost at 61;

0.01357 * 50000 = $678.5

Expected cost at 62;

0.01609 * 50000 = $804.5

Expected cost at 63;

0.01981 * 50000 = $990.5

Expected cost at 64;

0.02362 * 50000 = $1181

Total expected Cost :

1181 + 990.5 + 804.5 + 678.5 + 515 = 4169.5

To make $700 above total expected cost

(0.01030x + 0.01357x + 0.01609x + 0.01981x + 0.02362x = 4169.5 + 700

0.08339x = 4869.5

x = 4869.5 / 0.08339

x = 58394.291

x = 58394.30

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step-by-step explanation:

d. 24+-0.114

step-by-step explanation:

the question requires us to calculate the approximate 95% confidence interval for the mean number of ounces of ketchup per bottle in the sample given the following statistics;

sample mean = 24

standard deviation, σ = 0.4

sample size , n = 49

the confidence interval for a population mean is calculated using the formula;

sample mean ± z-score*(σ/sqrt(n))

the z-score associated with a 95% confidence interval, from the standard normal tables, is;

1.96

substituting these values into the formula;

24 ± 1.96*(0.4/7)

= 24 ± 0.112

from the alternatives given, choice d is closest to the above expression;