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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 (1)_____ . If the payout for each claim (after deductibles) is $8,000, the company’s total payouts will amount to $ (2)_____. If the company wants to keep a profit margin of 8%, the premium it must charge is $(3)_____. The company can set aside a maximum amount of $(4)_____ for this year’s investments.

answer choices
(1) A. 1250
B. 1500
C. 1750
D. 2000

(2) A.10,000,000
B. 12,000,000
C.13,000,000
D. 13,000,000

(3) A. 561.6
B. 583.2
C. 596.2
D. 604.8

(4) A. 40,000
B. 580,000
C. 905,000
D. 1,120,000

pls help!!! ive tried this like 10 times!!!!!!!!!

Respuesta :

joccalub

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 (1)____.

25,000*.07

1750

Answer: C. 1750

 

If the payout for each claim (after deductibles) is $8,000, the company’s total payouts will amount to $ (2)_____.

8000*1750

Answer: 14,000,000

Not included in the choices

 

If the company wants to keep a profit margin of 8%, the premium it must charge is $(3)_____.

Answer: D. 604.8 

Let X=premium

25,000(X)-14,000,000=net profit

(25,000X-14,000,000)/25,000X=.08

X=608.7

Nearest answer is D. 604.8 

The company can set aside a maximum amount of $(4)_____ for this year’s investments.

Answer: D. 1,120,000
25,000*604.8-14,000,000

15120000-14,000,000

1,120,000

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