Jim has a 5-year-old car in reasonably good condition. He wants to take out a $10,000 term (that is, accident benefit) car insurance policy until the car is 10 years old. Assume that the probability of a car having an accident in the year in which it is x years old is as follows: 5 6 x = age P (accident) 0.01182 0.01282 0.01386 0.01513 0.01602 Jim is applying to a car insurance company for his car insurance policy. Using the probabilities that the car will have an accident in its 5th, 6th, 7th, 8th, or 9th year, and the $10,000 accident benefit, what is the expected loss to Car Insurance Company for the respective years? Round your answers to the nearest dollar. O $118, $128, $139, $141, $160 O $118, $128, $139, $151, $160 $108, $128, $139, $141, $160 O $108, $133, $139, $151, $160 7 $118, $133, $139, $141, $160 8 9
Jim has a 5-year-old car in reasonably good condition. He wants to take out a $10,000 term (that is, accident benefit) car insurance policy until the car is 10 years old. Assume that the probability of a car having an accident in the year in which it is x years old is as follows: 5 6 x = age P (accident) 0.01182 0.01282 0.01386 0.01513 0.01602 Jim is applying to a car insurance company for his car insurance policy. Using the probabilities that the car will have an accident in its 5th, 6th, 7th, 8th, or 9th year, and the $10,000 accident benefit, what is the expected loss to Car Insurance Company for the respective years? Round your answers to the nearest dollar. O $118, $128, $139, $141, $160 O $118, $128, $139, $151, $160 $108, $128, $139, $141, $160 O $108, $133, $139, $151, $160 7 $118, $133, $139, $141, $160 8 9
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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![### Car Accident Probabilities and Expected Loss Calculation
**Scenario:**
Jim has a 5-year-old car in reasonably good condition. He wants to take out a $10,000 term car insurance policy until the car is 10 years old. Assume that the probability of a car having an accident in the year in which it is \( x \) years old is as follows:
| \( x \) (age) | 5 | 6 | 7 | 8 | 9 |
|---------------------|-----------|-----------|-----------|-----------|-----------|
| \( P(\text{accident}) \) | 0.01182 | 0.01282 | 0.01386 | 0.01513 | 0.01602 |
Jim is applying to a car insurance company for his car insurance policy. Using the probabilities that the car will have an accident in its 5th, 6th, 7th, 8th, or 9th year, and the $10,000 accident benefit, what is the expected loss to the Car Insurance Company for the respective years? Round your answers to the nearest dollar.
**Choose the correct answer from the options below:**
- \( \quad \) $118, $128, $139, $141, $160
- \( \quad \) $118, $128, $139, $151, $160
- \( \quad \) $108, $128, $139, $141, $160
- \( \quad \) $108, $133, $139, $151, $160
- \( \quad \) $118, $133, $139, $141, $160
To find the expected loss for each year, calculate:
\[ \text{Expected Loss} = \text{Probability of Accident} \times \text{Accident Benefit} \]
**Calculations:**
1. For \( x = 5 \):
\[ \text{Expected Loss} = 0.01182 \times 10,000 = $118.20 \approx $118 \]
2. For \( x = 6 \):
\[ \text{Expected Loss} = 0.01282 \times 10,000 = $128.20 \approx $128 \]
3. For \( x = 7 \):](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb60143f3-9501-4d24-b06f-d45fe07a8f4f%2F99868300-edba-4eb7-b5e4-c166b82cc609%2Fx7z58ve_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Car Accident Probabilities and Expected Loss Calculation
**Scenario:**
Jim has a 5-year-old car in reasonably good condition. He wants to take out a $10,000 term car insurance policy until the car is 10 years old. Assume that the probability of a car having an accident in the year in which it is \( x \) years old is as follows:
| \( x \) (age) | 5 | 6 | 7 | 8 | 9 |
|---------------------|-----------|-----------|-----------|-----------|-----------|
| \( P(\text{accident}) \) | 0.01182 | 0.01282 | 0.01386 | 0.01513 | 0.01602 |
Jim is applying to a car insurance company for his car insurance policy. Using the probabilities that the car will have an accident in its 5th, 6th, 7th, 8th, or 9th year, and the $10,000 accident benefit, what is the expected loss to the Car Insurance Company for the respective years? Round your answers to the nearest dollar.
**Choose the correct answer from the options below:**
- \( \quad \) $118, $128, $139, $141, $160
- \( \quad \) $118, $128, $139, $151, $160
- \( \quad \) $108, $128, $139, $141, $160
- \( \quad \) $108, $133, $139, $151, $160
- \( \quad \) $118, $133, $139, $141, $160
To find the expected loss for each year, calculate:
\[ \text{Expected Loss} = \text{Probability of Accident} \times \text{Accident Benefit} \]
**Calculations:**
1. For \( x = 5 \):
\[ \text{Expected Loss} = 0.01182 \times 10,000 = $118.20 \approx $118 \]
2. For \( x = 6 \):
\[ \text{Expected Loss} = 0.01282 \times 10,000 = $128.20 \approx $128 \]
3. For \( x = 7 \):
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