Insurance Companies Track Life Expectancy Information To Assist In Determing The Cos 1189734

Insurance Companies track life expectancy information to assistin determing the cost of life insurance policies. Last year theaverage life expectancy of all policy holders was 77 years. ABIInsurance wants to determine if their clients now have a longerlife expectancy, on average, so they randomly sample some of theirrecently paid policies. The ages of the clients in the sample areshown below.

86 75 83 84 81 77 78 79 79 81

76 85 70 76 79 81 73 74 72 83

a) Based on the sample results, find the 90% cofidence intervaland interpret

b) For more accurate cost determination, ABI Insurance wants toestimate the average life expectancy to within one year with 95%cofidence. How many randomly selected recently paid policies wouldthey need to sample?

c) Suppose ABI samples 100 recently paid policies. This sampleyields a mean of 77.7 years and a standard deviation of 3.6 years.Find a 90% cofidence interval and interpret.

Prof. Angela


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