A car insurance policy costs P7000 per year from an insurance firm. The insurer shall pay P10,000 for a minor accident and P50000 for a big accident, according to the policy. How much can an insurance company expect to make on a policy if the probability of a motorist having a minor accident over the year is 0.20 and a big accident is 0.05? a. 1500 b. 4500 c. 3500 d. 2500

College Algebra
10th Edition
ISBN:9781337282291
Author:Ron Larson
Publisher:Ron Larson
Chapter8: Sequences, Series,and Probability
Section: Chapter Questions
Problem 41CT: On a game show, a contestant is given the digits 3, 4, and 5 to arrange in the proper order to form...
icon
Related questions
Question
A car insurance policy costs P7000 per year from an insurance firm. The insurer shall pay P10,000 for a minor accident and P50000 for a big accident, according to the policy. How much can an insurance company expect to make on a policy if the probability of a motorist having a minor accident over the year is 0.20 and a big accident is 0.05? a. 1500 b. 4500 c. 3500 d. 2500
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Recommended textbooks for you
College Algebra
College Algebra
Algebra
ISBN:
9781337282291
Author:
Ron Larson
Publisher:
Cengage Learning
Holt Mcdougal Larson Pre-algebra: Student Edition…
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL
College Algebra (MindTap Course List)
College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning