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August 2, 2015

Homework Help: statistic

Posted by john on Saturday, June 26, 2010 at 1:16pm.

Jim has a 5-year-old car in reasonably good condition. He wants to take out a $30,000 term (that is, accident benefit) car insurance policy until the car is 10 years old. Assume that the probability of a car having an accident in the year in which it is x years old is as follows:
x = age
5
6
7
8
9

P (accident)
0.01191
0.01292
0.01396
0.01503
0.01613



Jim is applying to a car insurance company for his car insurance policy. If the car insurance company wants to make a profit of $900 above the expected total losses, how much should it charge for the policy? Round your answer to the nearest dollar

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