It is estimated that there are 21 deaths for every 10 million people who use airplanes. a company that sells flight insurance provides $100,000 in case of death in a plane crash. a policy can be purchased for $1. calculate the expected value and thereby determine how much the insurance company can make over the long run for each policy that it sells. the expected value is $1 (round to the nearest cent.)

$0.79 profit per person who buys a policy

Step-by-step explanation:

For every 10 million people who buy a policy the expected outcome is

$(21*100,000) = $2,100,000  (21 deaths out of 10 million)

the expected income is  

$10,000,000  ($1 per sold policy)

So the expected profit is

$10,000,000 - $2,100,000 = $7,900,000

To obtain how much the insurance company can make for each policy that it sells, we cross multiply

10,000,000 people > $7,900,000 profit

1 person   > x

and

10,000,000=7,900,000/x and x = $0.79 profit per person who buys a policy

i need points

step-by-step explanation:

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