Question: You recently had an auto accident that was your fault. If you have another accident or receive another moving violation within the next 3 years,

You recently had an auto accident that was your fault. If you have another accident or receive another moving violation within the next 3 years, you will become part of the "assigned risk" pool, and you will pay an extra $600 per year for insurance. If the probability of an accident or moving violation is 20% per year, what is the probability distribution of your "extra" insurance payments over the next 4 years? Assume that insurance is purchased annually and that violations register at the end of the year-just in time to affect next year's insurance premium.

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