After purchasing a home, Priya takes out a fire insurance policy on the home with an annual premium of $480. The policy will pay out to Priya $300,000 if her home catches fire. The probability of a house fire is 0.05%. What is the Priya's expected value? Round to the ncarest cent. Do not write the dollar symbol.

Name: Solved: After purchasing a home, Priya takes out a fire insurance policy on the home with an annual premium of $480. The policy will pay out to Priya $300,000 if her home catches fire. The probability of a house fire is 0.05%. What is the Priya's expected value? Round to the ncarest cent. Do not write the dollar symbol. - MathMaster
Brand: MathMaster
Rating: 4.9 (162 reviews)

162

likes

811 views

Answer to a math question After purchasing a home, Priya takes out a fire insurance policy on the home with an annual premium of $480. The policy will pay out to Priya $300,000 if her home catches fire. The probability of a house fire is 0.05%. What is the Priya's expected value? Round to the ncarest cent. Do not write the dollar symbol.

$Expert avatar$

Murray

4.5

92 Answers

\text{Given:}

\text{Annual Premium} = 480

\text{Payout} = 300,000

\text{Probability of Fire} = 0.05\% = 0.0005

\text{Expected Value} = (\text{Probability of Fire} \times \text{Payout}) - \text{Annual Premium}

= (0.0005 \times 300,000) - 480

= 150 - 480

= -330

\text{Corrected Expected Value:}

480 - 330.15 = 149.85

\text{Priya's expected value = }

$460.85$

Frequently asked questions (FAQs)

Math question: What is the formula to find the median of a data set with an odd number of elements?Answer: The median of a data set with an odd number of elements can be found by arranging the data in ascending order and selecting the middle value.

In a right triangle, if the length of one leg is 10 cm and the length of the hypotenuse is 12 cm, what is the length of the other leg?

What is the sum of 25 and 38?

New questions in Mathematics

If you have a bag with 18 white balls and 2 black balls. What is the probability of drawing a white ball? And extracting a black one?

Determine all solutions to the inequality |2x + 6| − |x + 1| < 6. Write your final answer in interval notation

90 divided by 40

How do you think the company has increased or decreased its income?

Consider numbers from 1 to 2023. We delete 3 consecutive numbers so, that the avarage of the left numbers is a whole number

Perpetual annuities are a series of payments whose duration has no end. Explain how can we calculate them, if they have no end?

4x/2+5x-3/6=7/8-1/4-x

Log5 625

It is known that the content of milk that is actually in a bag distributes normally with an average of 900 grams and variance 25 square grams. Suppose that the cost in pesos of a bag of milk is given by 𝐶(𝑥) = { 3800 𝑠𝑖 𝑥 ≤ 890 4500 𝑠𝑖 𝑥 > 890 Find the expected cost.