A company that sells annuties must base the annual payment on the probability distribution of the length of life of the participants in the plan. Suppose the probability distribution of the lifetimes of the participants is approximately a normal distribution with a mean of 68 years and a standard deviation of 3.5 years. What proportion of the plan recipients would receive payments beyond age 75?
The lifetimes of the participants are normally distributed with mean = 68 years and standard deviation of 3.5 years. We need to find the area under normal curve for lifetimes greater than 75 ...
Solution contains explanation and formula for calculating proportion of the plan recipients would receive payments beyond age 75