Assume 6 in every 2000 students at the local community college have to quit due to serious health issues. An insurance company offers them a $10,000 policy for $60 a year. What is the amount the insurance company should expect to make on average on every student that pays?

Question

Tiana

Mathematics

20 February, 08:19

Assume 6 in every 2000 students at the local community college have to quit due to serious health issues. An insurance company offers them a $10,000 policy for $60 a year. What is the amount the insurance company should expect to make on average on every student that pays?

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Vicente Mcfarland · Answer 1

Given:

6 out of 2000 students quit community college due to serious health issues.

$10,000 insurance company offer

$60 per year

Based on the data, there are 6 students who will be given the $10,000 insurance per year. So they need

6 * 10,000 = $60,000 to make a break-even on their insurance offer

If a student pays $60 per year, they should have

$60,000 / $60 = 1,000 students who will pay per year to reach the break-even mark of their investment. If the number of students will exceed 1,000, the company will begin to earn.