An insurance company offers three policy options. The probability a car will be damaged
in a given year is 5%, and if a car is damaged,
the cost of the repairs will be $1000. Which
option has the least expected annual cost for
the car owner? Explain.

Insurance Policy Options

Annual. Deductible
(A) 900. (A) 0
(B) 800. (B) 400
(C) 700. (C) 1000

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step-by-step explanation:

answer: a.

step-by-step explanation: the answer is a. because, you need to converge the fractions to find a solution.

the solution of the equation is 2.23 ⇒ answer b

step-by-step explanation:

* lets revise the meaning of exponential function

- the form of the exponential function is y = ab^x, where a ≠ 0, b > 0 ,  

  b ≠ 1, and x is any real number

- it has a constant base b

- it has a variable exponent x

- to solve an exponential equation, take the log or ln of both sides,  

  and solve for the variable

* lets solve the problem

∵

- the base is 7 and the exponent is x

- insert ㏑ in both sides

∴

- use the rule

∴ x ㏑(7) = ㏑(77)

- to find x divide both sides by ㏑(7)

∴

* the solution of the equation is 2.23 to the nearest 2 decimal places