ACME insurance company estimates that the probability of the owners' of a house a
worth between $120,000 to $170,000 making a claim for $5000 is 0.09, and that
the probability of the house and contents being totally destroyed is 0.0040. Should
that tragedy happen, the company will have to pay $150,000. The company charges
$1300 for the insurance policy.
What is the expected value of this policy to the insurance company?
Round your answer to two decimal places.