Assume 3 in every 1000 students at a local community college have quit due to serious health issues. An insurance company offers them an $8000 policy for $50 a year. What is the amount the insurance company should expect to make on average on every student that pays?

I got 23.85 is this correct?

Question

Assume 3 in every 1000 students at a local community college have quit due to serious health issues. An insurance company offers them an $8000 policy for $50 a year. What is the amount the insurance company should expect to make on average on every student that pays?

I got 23.85 is this correct?

mertsj · Answer

Not enough information.

anonymous · Answer

1000 students pay $50,000
Insurance payouts are $24,000

So, profit = $26,000
Per student = $26

mertsj · Answer

how do we know there are 1000 students?

anonymous · Answer

Lot of assumptions in it. :-) Also, assuming no other student gets sick and needs paid any amount. etc. etc. etc...!

anonymous · Answer

Thank you for answering!