a.What premium amount must Wile E. and Rhoda each individually pay if Acme Insurance wants to "break-even"?

i.0 x 0.9603 + $200,000 x 0.0297 + $200,000 x 0.0097 + $400,000 x 0.0003 = 8,000

ii.$8,000 will be the premium amount they both will pay if Acme insurance wants to "break-even."

b.Will Wile E. purchase this contract if he is charged the "break-even" premium? Will Rhoda purchase this contract if she is charged the "break-even" premium? Briefly explain your reason.