Insurance

The house owner is insured against natural disasters and pays 0.05% annually of the value of the house 88 Eur.

Calculate the value of the house.

Calculate the probability of disaster if you know that 50% of the insurance is to pay damages.

Correct answer:

d =  176000 eur
p₂ =  0.03 %

Step-by-step explanation:

$$\begin{gathered} r=0.05\%=\frac{0.05}{100}=0.0005 \\ 88=d\cdot r\text{eur} \\ d=\frac{88}{r}=\frac{88}{0.0005}=176000\text{eur} \end{gathered}$$

$p_2=r\cdot 50=0.0005\cdot 50=0.03\%$

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