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12 March, 14:43

Assume that the probability of a driver getting into an accident is 5.7% and

that the average cost of an accident is $24,500. If the driver's insurance

premium is $1686.50, what is the overhead cost for the insurance company

to insure the driver?

A. $256

B. $190

C. $290

D. $260

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Answers (1)
  1. 12 March, 15:15
    0
    C. $290

    Step-by-step explanation:

    The expected cost is:

    E = 1686.50 - (0.057) (24500)

    E = 290
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