An

insurance pays losses subject to an ordinary deductible of

$1000 and a coinsurance factor of 80%. The coinsurance factor is

applied before the deducible, so that nothing

is paid for losses

below $1250

.

You are given:

1)

Losses follow a two parameter Pareto distribution with

=

2

2)

Average payment per loss is 2500.

Determine the average

loss

.