A private pilot wishes to insure his airplane for $1,000.000. The insurance company estimates that a total loss will occur with probability 0.002, a 50% loss with probability 0.1. Ignoring all other partial losses, what premium should the insurance company charge each year to realize an average profit of $25,000? Note: Do not round off or round up in between calculations.

A private pilot wishes to insure his airplane for $1,000.000. The insurance company estimates that a total loss will occur with probability 0.002, a 50% loss with probability 0.1. Ignoring all other partial losses, what premium should the insurance company charge each year to realize an average profit of $25,000? Note: Do not round off or round up in between calculations.

Intermediate Algebra

19th Edition

ISBN:9780998625720

Author:Lynn Marecek

Publisher:Lynn Marecek

Chapter12: Sequences, Series And Binomial Theorem

Section12.3: Geometric Sequences And Series

Problem 12.58TI: What is the total effect on the economy of a government tax rebate of $500 to each household in...

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