Mathematics: A28-year-old man pays $181 for a one-year life insurance policy with coverage of $150,000. if the probability that he will live through the year is 0.9994, what is the expected value for the insurance policy?

A28-year-old man pays $181 for a one-year life - id281814995605, Jorjalilli8081

Ответ:

xojade

08.10.2021

Mathematics

0.985 = 98.5% probability that the sample mean will be between $7.75 and $8.20.

Step-by-step explanation:

To solve this question, we need to understand the normal probability distribution and the central limit theorem.

Normal Probability Distribution

Problems of normal distributions can be solved using the z-score formula.

In a set with mean $\mu$ and standard deviation $\sigma$ , the z-score of a measure X is given by:

$Z = \frac{X - \mu}{\sigma}$

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the p-value, we get the probability that the value of the measure is greater than X.

Central Limit Theorem

The Central Limit Theorem establishes that, for a normally distributed random variable X, with mean $\mu$ and standard deviation $\sigma$ , the sampling distribution of the sample means with size n can be approximated to a normal distribution with mean $\mu$ and standard deviation $s = \frac{\sigma}{\sqrt{n}}$ .