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A private pilot wishes to insure his airplane for $ 400,000. The insurance company estimates that a total loss will occur with probability 0.002, a

A private pilot wishes to insure his airplane for $ 400,000. The insurance company estimates that a total loss will occur with probability 0.002, a 50% loss with probability 0.01, and a 25% loss with probability 0.1. Ignoring all other partial losses, what premium should the insurance company charge for each year to realize an average profit of $ 500.

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