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You purchase a brand new car for $10500 and insure it. The policy pays 80% of the car's value if there is an issue with the engine or 27% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.008, and the probability there is an issue with the speaker system is 0.017. The premium for the policy is p. Let X be the insurance company's net gain from this policy. a. Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. X P(X) b. Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent. $ 0

You purchase a brand new car for $10500 and insure it. The policy pays 80% of the car's value if there is an issue with the engine or 27% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.008, and the probability there is an issue with the speaker system is 0.017. The premium for the policy is p. Let X be the insurance company's net gain from this policy. a. Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. X P(X) b. Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent. $ 0

Algebra and Trigonometry (MindTap Course List)
Algebra and Trigonometry (MindTap Course List)
4th Edition
ISBN:9781305071742
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter14: Counting And Probability
Section14.CR: Chapter Review
Problem 35E
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You purchase a brand new car for $10500 and insure it. The policy pays 80% of the car's value if there is an issue with the engine or 27% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.008, and the probability there is an issue with the speaker system is 0.017. The premium for the policy is p. Let X be the insurance company's net gain from this policy. a. Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. P(X) b. Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent. $ 0
Transcribed Image Text:You purchase a brand new car for $10500 and insure it. The policy pays 80% of the car's value if there is an issue with the engine or 27% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.008, and the probability there is an issue with the speaker system is 0.017. The premium for the policy is p. Let X be the insurance company's net gain from this policy. a. Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. P(X) b. Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent. $ 0
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