Question

there is a 0.9985 probability that a randomly - selected 29 - year - old male lives through the year. a life insurance company charges $177 for insuring that the male will live through the year. if the male does not survive the year, the policy pays out $100,000 as a death benefit. complete parts (a) through (c) below. a. from the perspective of the 29 - year - old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? the value corresponding to surviving the year is $ . the value corresponding to not surviving the year is $ . (type integers or decimals. do not round.)

Explanation:

Step1: Calculate probability of not - surviving

The probability of surviving is $P(S)=0.9985$. The probability of not - surviving $P(NS)$ is $1 - P(S)$.
$P(NS)=1 - 0.9985=0.0015$

Step2: Determine monetary value for not - surviving

If the male does not survive, the policy pays out $\$100000$. So the monetary value corresponding to not - surviving is $\$100000$.

Step3: Determine monetary value for surviving

If the male survives, the only cost is the insurance premium of $\$177$. So the monetary value corresponding to surviving is $-\$177$ (negative because it's a cost).

Answer:

The value corresponding to surviving the year is $- 177$. The value corresponding to not surviving the year is $100000$.