6 What is the . ho --- 5. An insurance company wants to estimate the cost of vehicle insurance premiums (annual and decide on how much they should charge the customers in four different age groups to get a certain profit. The data on probability of accidents, average cost of repair per accidents, and anticipated number of policies to be sold for each age group of drivers annually are provided in the table. The company will pay each policy holder $100 if they did not have any accidents during that year. What is the expected average cost per policy? How much should the company charge as annual insurance premium for each group if the company wants to have an expected profit of $3,000,000 from each group? Details of the probability of accidents, expected repair costs, and expected number of policies sold for each group is provided in the table below. (Hint: use the probabilities and costs to find the expected cost per policy. Then you can calculate how much to charge for each policy to make the given profit] 0.01 Age Group 25-35 35-60 0.02 $5.000 $4,000 60,000 60,000 $3,000,000 $3,000,000 16.25 0.03 $10,000 50,000 $3,000,000 >60 0.04 52.000 50.000 $3,000,000 Probability of accident Average repair cost per accident Expected number of'policies sold Expected profit >>60 Age Group 25-35 35-60 16-25 Expected cost of premium Profit/policy required Annual insurance premium charged