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29 May, 16:27

An insurance company sells a homeowner insurance policy that is $600 per year policy the insurance company predicts that the probability of having a home being damaged in the area. It sells this policy is about 1. over 1000 if the house is damaged the insurance company expects to pay $400,000 to the homeowners. If the company were to sell 250 policies how much money can it expect to gain or lose?

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  1. 29 May, 19:37
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    They would lose money since there are 250 people that are going to pay $600 a year so they would get 150,000 but have to pay 400,000 if someone house gets destroyed
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