You purchase a brand new car for $17250 and insure it. The policy pays 61% of the car's value if there is an issue with the engine or 24% 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 0.025. 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. 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.
You purchase a brand new car for $17250 and insure it. The policy pays 61% of the car's value if there is an issue with the engine or 24% 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 0.025. 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. 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.
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...
Related questions
Concept explainers
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Topic Video
Question
Transcribed Image Text:You purchase a brand new car for $17250 and insure it. The policy pays 61% of the car's value if there is an issue with the engine
or 24% 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 0.025. 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. 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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, probability and related others by exploring similar questions and additional content below.Recommended textbooks for you
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL