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Ricky Said:

normal distribution help!!!!!!!!?

We Answered:

P = net level premium...

P = [0.8*0.0001 + 0.2*0.0002] 1,000,000
= 120

the first term is the probability that the person chosen is a nonsmoker... and he dies...

the second term is the probability of dying of a smoker...


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Warren Said:

MORE CONSUMER MATH HELP?

We Answered:

$4.87 x 50 = $243.50
50 comes from $50,000 / $1,000

FV = $20,000(1 + 0.055/12)^12 = $21,128.16
effective annual yield = (1 + 0.055/12)^12 - 1 = 0.056408 = 5.6408%
FV = $20,000(1 + 0.0625/4)^4 = $21,279.60
effective annual yield = (1 + 0.0625/4)^4 - 1 = 0.063980 = 6.398% (the correct answer)

Profit = $32.52*1200 - $31.45*1200 = $1284
or = 1200($32.52 - $31.45) = $1284

Lucille Said:

==MORE CONSUMER MATH==?

We Answered:

Life Insurance:
50 * 4.87 = 243.50
_________________ _____________________
Quarterly vs Monthly Interest
5.5% per 12 months = 1.004583 per month
1.004583^12 = 1.05640786 per year or 5.64%

6.25% per 4 quarters = 1.015625 per quarter
1.015625^4 = 1.06398016

(Right before "Note", you stated these compound *annual* rates
as monthly or quarterly, which is a misstatement, but your numbers are ok.)

Quarterly is better and you get 1.015625^4 * 20000 = 21279.60
I agree with your answer.

EDIT:
The *yield* is 6.398 % or 1279.60
(rather than the total amount at the end of the term.)
_________________ _____________________
Stock:
Profit = 32.52 - 31.45 = 1.07 per share * 1200 = $1284