Question

Five people buy individual insurance policies. According to the research, the probability of each of these people not filing a claim for at least 5 years is 2/3 . What is the probability that all 5 have not filed a claim after 5 years?

Answer 1

Probability = 0.135

Explanation:

Prob (one person doesn't file claim) = 2 / 3 = 0.67

Prob (5 people don't file claim) = p1 doesn't & p2 doesn't ...& p5 doesn't , ie = 0.67 x 0.67 x 0.67 x 0.67 x 0.67

= 0.67^5

= 0.135