AIR MATH

Math Question

10. An insurance company sells a policy for \( \$ 5000 \). There is a 3 in 20 probability that the insurance company will have to pay \( \$ 10,000 \) claim, a 1 in 100 probability that the insurance company will have to pay a \( \$ 25,000 \) claim, and 1 in 500 probability that the insurance company will have to pay a \( \$ 200,000 \) claim. What is the expected value to the insurance company of each policy it sells?

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