Let A and B be independent events such that PA 03 and PB 05

Let A and B be independent events such that P(A) = 0.3 and P(B) -0.5. Find the indicated probabilities An insurance company will insure a $ 100,000 home for its total value for an annual premium of $330. If the company spends $20 per year to service such a policy, the probability of total loss for such a home in a given year is 0.002, and you assume that either total loss or no loss will occur, what is the company\'s expected annual gain (profit] on each such policy?

Solution

NOTE: WE ARE SUPPOSE TO ANSWER 1 QUESTION AT A TIME SO I WILL ANSWER 1ST FOR REST REPOST AGAIN. ALSO TILL 4 SUBPARTS WE ARE SUPPOSE TO ANSWER.

1)P(A)=0.3 , P(B) = 0.5 P(A AND B )= 0.5*0.3= 0.15

2)P(A/B) = P(AND B)/P(B)= 0.15/0.5 = 0.3

3)P(B/A)= P(B AND A)/P(A) = 0.15/0.3= 0.5

4)P(A OR B ) = 0.3+0.5 = 0.8

5) COMPLIMENT = 1-0.15= 0.85

6)COMPLIMENT = 1-0.8=0.2