RISK-INSURANCE premium

[SoniaKapoor]

Ali has an initial wealth of 100000 and a utility function U(w)=w^.5.He faces a loss of 100000 with probability 1%.What is the maximum insurance premiumhe will be prepared to pay to guard against the loss?

[Amit Goyal]

Let P denotes the premium. P solves the following:
.99[(100000)^.5] = (100000-P)^.5

[SoniaKapoor]

Thanku Sir