Need an automotive insurance company has 25,000 policyholders. the accident rate is 0.07. the number of accidents the company will have to pay out for is . if the payout for each claim (after deductibles) is $8,000, the company’s total payouts will amount to $ if the company wants to keep a profit margin of 8%, the premium it must charge is $ the company can set aside a maximum amount of $ this year’s investments. answers for the first blank are 1,250, 1,500, 1,750, 2,000 answers for second blank are 10,000,000, 12,000,000, 13,000,000, 14,000,000 3rd blank answers are 561.6, 583.2, 596.2, 604.8 4th blank answers are 40,000, 580,000, 905,000, 1,120,000 !

The number of accidents the company will have to pay out for is 1,750. If the payout for each claim (after deductibles) is $8,000, the company’s total payouts will amount to $14,000,000. If the company wants to keep a profit margin of 8%, the premium it must charge is $604.8. The company can set aside a maximum amount of $1,120,000 for this year’s investments.

1.) 25,000 policyholders x 7% accident rate = 1,750
2.) 8,000 payout x 1,750 number of accidents = 14,000,000
3.) 14,000,000 expense x (1 + 8% profit margin) = 15,120,000 / 25,000 policy holders = 604.8
4.) 8,000 x 8% profit margin = 640 (which is higher than the premium) x 1,750 numer of accidents = 1,120,000 (I'm not so sure with this one tho)