00:01
So the likelihood of dying at age 60 for that female is only .00756.
00:11
And the expected amount that the insurance company would pay, i'll call that random variable y.
00:19
And we know that they'll either pay out zero or they'll pay out 50 ,000.
00:25
And they're going to pay out 50 ,000.
00:27
Point zero excuse me point nine let's see nine two four four and they're going to pay out 50 ,000 less than one percent of the time and if we find the expected value zero times this and then 50 ,000 times this we found out that they expect to pay out let's see what that comes out to be three hundred seventy eight dollars for a who dies at age 60.
01:00
Now part b asks us to continue to do that for all of these ages and so in effect we need to take the probability of dying at that particular age times 50 ,000 as i did up here to find what the expected payout is for that particular age.
01:20
So let's just stay in blue.
01:22
So we'll just say that age is x and so we know 60 they have to pay out 378.
01:29
For 61, i take its probability of death times, which is about 0 .825%, and that comes out to be a payout of $412 .50...