In a given year there is a 3% chance you will get in a small accident costing around $2000 and 0.1% chance you will get in a major accident costing around $150,000 and a 96.9% chance you will not get in any accident what premium should insurance company charge if they want an average profit of $400

$475

Step-by-step explanation:

There are 3 possible accident in this question

3% chance of losing $2000

0.1% chance of losing $150,000

96.9% chance of losing $0

Then the expected value that you will lose is:

3%*  $2000  + (0.1% *  $15000) + (96.9% * $0)= $75

Profit made by subtracting the price with the lose. If the company want average profit $400, the charge should be:

average profit = premium price - average lose

premium price= average profit + average lose

premium price= $400 + $75 = $475

the answer is d. 75%

step-by-step explanation:

step 1: solve one of the equations for one of the variables. let's solve the first equation for y:

step 2: substitute that equation into the other equation, and solve for x.

step 3: substitute x = 4 x = 4 x=4 into one of the original equations, and solve for y.