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The gross claim cost for an insurance company in 2 0 0 6 on an automobile policy is the sum of three independent components: a

The gross claim cost for an insurance company in 2006 on an automobile policy is the sum of three independent components:
a. Repair costs, with a mean of 2,500 and a standard deviation of 500
b. Legal costs, with a mean of 4,000 and a standard deviation of 2,000
c. Fixed expenses of 250
The inflation from 2006 and 2007 was 5% for repair costs, 10% for legal costs, and 8% for fixed expenses. Calculate the standard deviation of the gross claim cost in 2007.
a
2,159
b
2,262
c
2,971
d
3,263

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