Question

 Program this in RStudio

A insurance company is estimating the risk in 250 annual policies. If 10% of the policy holders have at least one claim per year(accident) as usual. What's the probability that more than 12% of 250 has at least one claim?

Answer 1

For answering this question, we have to do two things:

• Calculate cumilative probability of people filing at least one claim per year. This will contain the probability value of atleast 12% out of 250 people filing at least one claim.
  • For calculating cumilative probability we will use pbinom function.
• Subtarct the abover mentioned probability value from 1 to calculate the probability that more than 12% of 250 has at least one claim.

###Assign probability percent to variable##
prob_perc<-0.12

###Save total sample size in variable##
tot<-250

###Calculate the probability by multiplying probability percent with total##
##sample size##
samp_pop<-(prob_perc*tot)

###Calculate the probabiltiy that atleast 12% of population has##
##atleast one claim##

##Here samp_pop gives the size of 12% of population(Out of 250 people)
##tot is the size of entire population i.e. 250 people
##0.1 is nothing but the fact that 10% of policy holders have atleast one claim

till_12<-pbinom(samp_pop,tot,.1)

###Calculate probability that more than 12% of 250 has at least one claim##
##This is done by subtracting the claim of atleast 12% of population from the##
##entire data##

atleast_one<-1-(till_12)

##See the output##
atleast_one