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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