



 
Hi Katrina, To find the expected value of a random variable you take each possible value of the random variable, multiply by the probability of that value occurring and then add them up. One way to look at this problem is to say that the random variable X is the amount of money the insurance company has made or lost on this policy at the end of the year. X has the value $350 if the policy holder lives and X has the value Can you complete the problem now?  


Math Central is supported by the University of Regina and The Pacific Institute for the Mathematical Sciences. 