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Task #Experiential Learning
It's Arshia’s birthday and she has a bag full of 7 toffees and 3 chocolates. She asked you to pick one from
the bag. (Consider all events as individual.)
Try to fill in the blanks with – likely, unlikely, certainly, impossible, equal probability
1. If you pick from the bag without looking, it is that you will pick toffee.
2. If you pick from the bag without looking, it is that you will pick a chocolate.
3. If you pick from the bag without looking, it is that you will pick a cake.
4. If you remove 4 toffees from the bag, and pick without looking, there is an that you
pick a chocolate or a toffee.
5. If you pick from the bag with all toffees removed and pick without looking, you will
pick a chocolate.
Case 1
Health insurance companies often use probability to determine how likely it is that certain individuals will spend a
certain amount on healthcare each year and determine risk factors for contracting a disease and for being cured.
For example, a company might use factors like age, existing medical conditions, current health status, etc. to
determine that there’s a 90% probability that a certain individual will spend `10,000 or more on healthcare in a
given year.
Individuals who are likely to spend more on healthcare will be charged higher premiums because the insurance
company knows that they’ll be more expensive to insure.
• Scenario 1: If the person is young, below 25 years of age, then the insurance premium will be very low.
Age below 25 Age 40-60
Premium very low Premium very high
Age 25-40 Age above 60
• • •Scenario 2: If the person is middle-aged (25–40), then the insurance premium will be of higher value than that
in the first category.
Premium very low Age below 25 Age 40-60 Premium very high
Age 25-40 Age above 60
• Scenario 3: If the age of the person is 40-60, then the premium charged will be quite high.
Age below 25 Age 40-60
Premium very low Premium very high
Age 25-40 Age above 60
• Scenario 4: If the person is above 60 years of age then the premium charged is of the highest bracket.
Maths for AI (Statistics & Probability) 189

