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An Insurance Company Insures 100,000 Cars in a Certain Area

Question 64

Multiple Choice

An insurance company insures 100,000 cars in a certain area. The company has determined that on average, each year they will have to pay the following amounts for accidents in the area: ​
$100,000 with probability 0.0004
$50,000 with probability 0.001
$25,000 with probability 0.006
$5000 with probability 0.011
$1000 with probability 0.023

What is the company's expected payout per car each year?


A) $318.00
B) $4163.00
C) $4140.00
D) $381.60
E) $279.84

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