At the beginning of Year 1, your auto-insurance premium for the next year is $300.

At the beginning of Year 1, your auto-insurance premium for the next year is $300. If you have 0 accidents in a year your premium for the next year drops 10 percent, if you have 1 accident in a year your premium for the next year increases10 percent, and if you have 2 accidents in a year your premium for the next year increases 30 percent. Set up a spreadsheet that will determine the premium cost for Years 1–30.

Solutions

Expert Solution

Year 1

Premium amount = 300$

Year 2

If no accidents took place premium amount = 300(1-10%) = 270

If 1 accident occurs premium amount = 300(1+10%) = 330

If 2 accident occurs premium amount = 300(1+30%) = 390

Year 2

No accident occurs = 270(1-10%) = 243

If 1 accident = (330)(1+10%) = 363

If 2 accident = 390(1+30%) = 503

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Your auto insurance premium of $2200 is due today. You insurance company is giving you the...

Your auto insurance premium of $2200 is due today. You insurance company is giving you the "easy financing" option of making 12 monthly payments, with the 1st payment starting today. The interest rate on this financing option is 17.00% with monthly compounding. What's the monthly payment amount? The final answer would be 197.85

A customer buys a $250,000 life insurance policy with an annual premium of $300. Her probability...

A customer buys a $250,000 life insurance policy with an annual premium of $300. Her probability of dying during the year is 0.001. If she dies, the insurance company will have to give her beneficiary $250,000. a) If there is a 0.001 chance she dies, what is the probability she does not die? b) Fill in the table below, let X= Amount the insurance company makes. X P(X) c) Use a computer or calculator: What is the insurance company’s expected...

On April 1, Year8, the premium on a one-year insurance policy on equipment was paid. The...

On April 1, Year8, the premium on a one-year insurance policy on equipment was paid. The premium was $3,000. The company does not have any other insurance policies. The financial statements as of 12/31/Year8 would report: a. Insurance expense $750; Prepaid insurance $2,250. b. Insurance expense $0; Prepaid insurance $3,000. c. Insurance expense $2,250; Prepaid insurance $750. d. Insurance expense $2,000; Prepaid insurance $1000. e. Insurance expense $3,000; Prepaid insurance $0.

On July 1, 2018, a two-year insurance premium on equipment in the amount of $792 was...

On July 1, 2018, a two-year insurance premium on equipment in the amount of $792 was paid and debited in full to Prepaid Insurance on that date. Coverage began on July 1. Give the adjusting journal entry required for each item at December 31, 2018.

On February 1, 2017, a company paid an $21,600 premium on a 36-month insurance policy for coverage beginning on that date.

On February 1, 2017, a company paid an $21,600 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table. -Can Not Copy Table-- Table is for Balance Sheet-PrePaid Insurance And Income statement-Insurance expense

Calculate the minimum premium an insurance company should charge for $1 million 2-year term life insurance...

Calculate the minimum premium an insurance company should charge for $1 million 2-year term life insurance policy issued to a woman age 50. Assume that the premium is paid at the beginning of each year and that the interest rate is zero. Note that: the probability of death within one year at age 50 = 0.003182, and the probability of death within one year at age 51 = 0.003473. Q: What is the value of X if the interest rate...

A company makes the payment of a one-year insurance premium of $3,624 on March 1, 2016...

A company makes the payment of a one-year insurance premium of $3,624 on March 1, 2016 b-1. Use the horizontal model to show the amount of insurance premium "used" that month. (Use amounts with + for increases and amounts with – for decreases.)

On July 1, a company paid the $1,200 premium on a one-year insurance policy with benefits...

On July 1, a company paid the $1,200 premium on a one-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the first year ended December 31? Multiple Choice $500. $600. $300. $1,200. $900.

On April 1, a company paid the $1,800 premium on a three-year insurance policy with benefits...

On April 1, a company paid the $1,800 premium on a three-year insurance policy with benefits beginning on that date. What amount of the insurance expense will be reported on the annual income statement for the year ended December 31? a. $1,350.00. b. $450.00. c. $600.00. d. $1,800.00. e. $50.00.

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits...

On August 1, a company paid the $2,400 premium on a one-year insurance policy with benefits beginning on that date. What will the balance be in the Prepaid Insurance account on the Balance Sheet for the current year ended December 31? Select one: A. $1,000. B. $2,400. C. $1,400. D. $400. E. $1,200.

Subjects