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 ( . if the payout for each claim (after deductibles) is $8,000, the company’s total payouts will amount to $ ( if the company wants to keep a profit margin of 8%, the premium it must charge is $( the company can set aside a maximum amount of $( 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 ! ive tried this like 10 !

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

C. 1750

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

8000*1750

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).

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.

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

15120000-14,000,000

1,120,000

expression #3 is not equivalent. the others are.