Jim Has a 5-Year-Old Car in Reasonably Good Condition A)$3515
B)$3520
C)$3513
D)$3522
E)$3518

question 4

Multiple Choice

Jim has a 5-year-old car in reasonably good condition. He wants to take out a $50,000 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 charges $7000 for the policy, how much profit does the company expect to make? Round your answer to the nearest dollar.
$$\begin{array} { l c c c c c } x = \text { age } & 5 & 6 & 7 & 8 & 9 \\P \text { (accident) } & 0.01182 & 0.01282 & 0.01386 & 0.01513 & 0.01602\end{array}$$

• A)$3515
• B)$3520
• C)$3513
• D)$3522
• E)$3518

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Definitions:

Public Accountant

Accountant who provides accounting services to individuals or business firms for a fee.

Accounting Services

Professional services that include bookkeeping, auditing, tax preparation, and financial management advice.

Financing Activities

Transactions that involve raising capital or funds for a company's operations, including debt, equity, and other financial instruments.

Financial Statements

Reports detailing a company's financial performance and position, including the balance sheet, income statement, and cash flow statement.