A motorcycle Insurance company has 5,000 policy holders, and the accident rate is 0.08. The company needs to invest $400,000 this year. Each accident costs $18,000 on average.
If they want a plan with a deductible of $4,000, they need to charge a minimum of $
for premiums.
If they want a plan with a premium of $1,000, they need to charge a minimum of $
for deductibles.