State Farm Insurance Company charges a customer according to their accident history. A customer who has had no accident during the last two years is charged a $100 annual premium. Any customer who has had an accident during each of the last two years is charged a $400 annual premium. A customer who has had an accident during only one of the last two years is charged an annual premium of $300. A customer who has had an accident during the last year has a 10% chance of having an accident during the current year. If a customer has not had an accident during the last year, there is only a 3% chance that they will have an accident during the current year. During a given year, what is the average premium paid by a State Farm customer?
State Farm Insurance Company charges a customer according to their accident history. A customer who has had no accident during the last two years is charged a $100 annual premium. Any customer who has had an accident during each of the last two years is charged a $400 annual premium. A customer who has had an accident during only one of the last two years is charged an annual premium of $300. A customer who has had an accident during the last year has a 10% chance of having an accident during the current year. If a customer has not had an accident during the last year, there is only a 3% chance that they will have an accident during the current year. During a given year, what is the average premium paid by a State Farm customer?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:State Farm Insurance Company charges a customer according to their accident history. A customer who has
had no accident during the last two years is charged a $100 annual premium. Any customer who has had an
accident during each of the last two years is charged a $400 annual premium. A customer who has had an
accident during only one of the last two years is charged an annual premium of $300. A customer who has
had an accident during the last year has a 10% chance of having an accident during the current year. If a
customer has not had an accident during the last year, there is only a 3% chance that they will have an
accident during the current year. During a given year, what is the average premium paid by a State Farm
customer?
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