Question

Will award brainiest to whoever answers and helps, I really need this ;;

Mathematics of personal finance:

Assume that the probability of a driver getting into an accident is 7.1%, the average cost of an accident is $14,886.05, and the overhead cost for an insurance company per insured driver is $110. What should the driver's insurance premium be?

A)$1156.43
B)$1242.93
C)$1276.27
D)$1165.49

Answer 1

Multiply the probability by the cost of the accident:

14,886.05 x 0.071 = 1056.91

Now add the overhead cost:

1056.91 + 110 = 1166.91

The closest answer to this is number D.

Answer 2

Answer:

D. $1165.49

Step-by-step explanation:

We have that the probability of a driver getting into an accident = 7.1% i.e. 0.071.

Now, the average cost of an accident = $14,886.05

Then, the expected cost of an accident =  $14,886.05 × 0.071 = $1056.91

As, the overhead cost for insurance = $110

Therefore, the driver's insurance premium = $1056.91 + $110 = $1166.91

Since, the closest option to $1166.91 is option D.

Hence, the driver's insurance premium will be $1165.49.