#1
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Insurance Calculation
If I wanted to offer a friend insurance for a $102 test in which I estimate he has only about a 40% chance of passing, how do I calculate the rate?
Say I want to add a flat $10 fee for profit. I've come up with a couple numbers, one was like $73, and the other $19...so there is a large disparity in my calcs. Thanks! |
#2
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Re: Insurance Calculation
I assume he gets the $102 back from you if he fails?
If so, he has a 60% chance of failing so you should charge him: ($102)(0.6) + $10 = $71.20 |
#3
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Re: Insurance Calculation
Of course, if the idea is that he'll break even if he fails (including the insurance costs) then the fee should be:
x = (0.6)(102+x) + 10 x = 71.2/0.4 x = $178 and you give him $280 if he fails ($102 for the test and $178 for the insurance). Edit: did it OK after all. |
#4
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Re: Insurance Calculation
Yeah, I came up with that $71.20 number as well the first time.
Basically he signs up for the exam ($102) and sends me $71.20, and if he fails the exam and retakes, then I'll buy his retate ($102), but if he passes, I pocket the $71.20. There's no way he'd go for this though, as his net worth is like $100K. lol. I just thought it would be fun to offer it to him (and know that I'm offering a good amount). Is $10 fee on $102 test too much profit? |
#5
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Re: Insurance Calculation
[ QUOTE ]
Yeah, I came up with that $71.20 number as well the first time. Basically he signs up for the exam ($102) and sends me $71.20, and if he fails the exam and retakes, then I'll buy his retate ($102), but if he passes, I pocket the $71.20. There's no way he'd go for this though, as his net worth is like $100K. lol. I just thought it would be fun to offer it to him (and know that I'm offering a good amount). Is $10 fee on $102 test too much profit? [/ QUOTE ] Yes. |
#6
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Re: Insurance Calculation
I'd say, "for a friend, yes". For me, it's hard to say otherwise.
BTW, am I the only one who sees "Porn Ho Blower" every time I see your 2+2 name? |
#7
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Re: Insurance Calculation
[ QUOTE ]
I'd say, "for a friend, yes". For me, it's hard to say otherwise. BTW, am I the only one who sees "Porn Ho Blower" every time I see your 2+2 name? [/ QUOTE ] First time I saw it and for months after I thought it said, "Probonoblower". |
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