The premium that the insurance company should charge each year to realize an average profit of $500 is $6,900.
First step is to calculated the expected amount to pay
Expected amount=Total loss +50% loss+25% loss
Expected amount=$200,000(0.002)(1)+$200,000(0.01)(0.5)+$200,000(0.1)(0.25)
Expected amount=$400+$1,000+$5,000
Expected amount=$6,400
Second step is to calculate the premium
Premium=Expected amount+ Average profit
Premium=$6,400+$500
Premium=$6,900
Inconclusion the premium that the insurance company should charge each year to realize an average profit of $500 is $6,900.
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Answer:
Management is both an art and a science. ... It is considered as a science because it has an organized body of knowledge which contains certain universal truth. It is called an art because managing requires certain skills which are personal possessions of managers.
Explanation:
Earth rotates entirely on its axis once during this time
Earth's revolution is 365 days
The moon revolves around the Earth every 27.3 day
