Homework Help is Here – Start Your Trial Now!
Math
Probability
A private pilot wishes to insure his airplane for $400,000. The insurance company estimates that a total loss will o with probability 0.006, a 50% loss with probability 0.04, and a 20% 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 $8001 The insurance company should charge $ each year. (Type an integer or a decimal. Round to the nearest dollar as needed.)

A private pilot wishes to insure his airplane for $400,000. The insurance company estimates that a total loss will o with probability 0.006, a 50% loss with probability 0.04, and a 20% 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 $8001 The insurance company should charge $ each year. (Type an integer or a decimal. Round to the nearest dollar as needed.)

A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
See similar textbooks
icon
Related questions
Question
100%

I need help with this pls

A private pilot wishes to insure his airplane for $400,000. The insurance company estimates that a total loss will occur with probability 0.006, a 50% loss with probability 0.04, and a 20% 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 $800? The insurance company should charge $ each year. (Type an integer or a decimal. Round to the nearest dollar as needed.)
Transcribed Image Text:A private pilot wishes to insure his airplane for $400,000. The insurance company estimates that a total loss will occur with probability 0.006, a 50% loss with probability 0.04, and a 20% 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 $800? The insurance company should charge $ each year. (Type an integer or a decimal. Round to the nearest dollar as needed.)
Expert Solution
steps

Step by step

Solved in 4 steps with 4 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer