(PI) has determined the probability of customers having an accident during a given year from their records for the past year. A customer who has had an accident during the last year has a 10% chance of having an accident during the current year. If a customer has not had an accident during the last year, there is only a 3% chance that that person will have an accident during the current year. i. What is the probability that a customer, who has not had an accident during the current year, will have an accident four years from now?

ii. Suppose PI charges customers according to their accident history. A customer who has had no accident during the last two years is charged a $100 annual premium. Any customer who has had an accident during each of the last two years is charged a $400 annual premium. A customer who has had an accident during only one of the last two years is charged an annual premium of $300. During a given year, what is the average premium paid by a customer of PI?