2. Jim has a 5-year old car in reasonably good condition. He wants to take out a $40,000 term (that is accident benefit) car insurance policy until the car is 10 years old. Assume that the probability of a car having and accident in theyear in which it is x years old is as follow:
x=age
5
6
7
8
9
P(accident)
0.01191
0.01292
0.01396
0.01503
0.01613
Please show work
thank you
1 answer