.The expected profit on the policy is $9.97. Here is the calculation: def expected_profit(probability_of_living, premium, payout):
"""
Calculates the expected profit on a life insurance policy.
Args:
probability_of_living: The probability that the insured person will live.
premium: The amount of money charged for the policy.
payout: The amount of money paid out if the insured person dies.
Returns:
The expected profit on the policy.
"""
expected_profit_if_lives = premium
expected_profit_if_dies = -payout
expected_profit = (probability_of_living * expected_profit_if_lives) + (
(1 - probability_of_living) * expected_profit_if_dies)
return expected_profit
if __name__ == "__main__":
probability_of_living = 0.9995
premium = 60
payout = 100000
expected_profit = expected_profit(probability_of_living, premium, payout)
print("The expected profit on the policy is $", expected_profit)
As you can see, the expected profit is very small. This is because the probability of the insured person dying is very low. In this case, the insurance company is more likely to keep the $60 premium than it is to have to pay out $100,000. However, it is important to note that this is just the expected profit. The actual profit could be higher or lower, depending on whether the insured person dies or lives.