Assume that your liquid wealth is $100,000 and you own a car worth

$35,000. Every month, there is a 0.10% chance that you will get into a car accidentwhere the carwill be totalled and so you need to buy a new car. There is also a 0.50% chance that a damage of $5,000 will occur.

How much are you willing to pay for insurance if your risk-aversion parameter is γ = 1?