Jim Has a 5-Year-Old Car in Reasonably Good Condition A)$4977
B)$4969
C)$4989
D)$4979
E)$4981

question 31

Multiple Choice

Jim has a 5-year-old car in reasonably good condition. He wants to take out a $60,000 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: Jim is applying to a car insurance company for his car insurance policy. If the car insurance company wants to make a profit of $800 above the expected total losses of $4179, how much should it charge for the policy?
$$\begin{array} { l c c c c c } x = \text { age } & 5 & 6 & 7 & 8 & 9 \\P \text { (accident) } & 0.01182 & 0.01282 & 0.01386 & 0.01513 & 0.01602\end{array}$$

• A)$4977
• B)$4969
• C)$4989
• D)$4979
• E)$4981

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Definitions:

Collection Intervals

Specific periods of time during which data is gathered or collected for analysis or review.

Binomial Probability

The probability of observing a specific number of successes in a fixed number of binary trials.

Identical Trials

Experiments or tests in which the conditions and parameters are kept the same to ensure uniform results.

Dependent Trials

Experiments or trials in which the outcome or result of one affects the outcome or result of another.