Question

MAJORR HELP!

Atrap and Bracken are two rival insurance companies. Atrap has a yearly premium of $7,000 and a deductible of $6,000. Bracken has a yearly premium of $6,000 and a deductible of $5,000. The average expense of surgery is $25,000.

Answer 1

900

Explanation:

With a $6000 yearly premium and a $5000 deductible the break-even point would be 300 surgeries per year from a sample of 1000 insured people. Over 3 years that would equate to 900 surgeries.

$6000 x 1000 = $6000000

requiring surgery : $25000 - $5000 = $20000

Therefore $600000/$20000 = 300 claims per year

And 3 years x 300 = 900 claims over 3 years.