Answered: A health insurance company that…

Algebra & Trigonometry with Analytic Geometry

13th Edition

ISBN:9781133382119

Author:Swokowski

Publisher:Swokowski

Chapter10: Sequences, Series, And Probability

Section: Chapter Questions

Problem 29T

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A health insurance company that provides insurance against death has a previous year's reserve of $2,000. Calculate the probability that it will be solvent for the entire year knowing that 100 people use the company, who pay a premium of $100 at the beginning of the year, the probability of dying during the year is 0.01, and the benefit paid is $5000. To what amount can the premium be reduced so that the above probability does not fall below 80%.?

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