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Math Help - Rearange to find P

  1. #1
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    Rearange to find P

    12.6101579= (0.98\times (3ln(300000-P))) + (0.02\times (3ln(299500-P)))

    Please could somebody go through step by step how to make P the subject and solve it for me as well please.
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  2. #2
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    Hello Rapid_W
    Quote Originally Posted by Rapid_W View Post
    12.6101579= (0.98\times (3ln(300000-P))) + (0.02\times (3ln(299500-P)))

    Please could somebody go through step by step how to make P the subject and solve it for me as well please.
    I don't think you can solve this equation by algebraic means. Can we see the original question, please?

    Grandad
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  3. #3
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    Not really an algebra field, but seen as you asked nicely:

    An individual’s utility function is represented by

    U(x) = 3ln(x), where x, his total wealth including the value of his stamp collection, is 300,000.

    There is a 2% probability of theft or fire, which would make his collection, worth 20,000 worthless.

    The utility function of an insurance company is represented by
    U(x) = ln (x + 100,000)
    where x denotes the value of the company’s assets which are currently valued at 1,000,000.



    Show that the individual would be prepared to accept a
    policy where he would pay a premium of 300 and the first
    500 of a claim, so that the insurance company would pay
    out an amount in excess of 500.
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