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# ps theft insurance

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Manager
Joined: 05 Oct 2005
Posts: 201
Followers: 1

Kudos [?]: 0 [0], given: 0

ps theft insurance [#permalink]  02 Mar 2006, 03:55
00:00

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
Lee College insures its students for thefts up tp \$1000. The college
makes no profit, but sets the premium to cover administrative costs of
10 per cent on an average claim of \$120. If the annual premium per
student is \$24, what is the expected number of thefts per 100 students
per year?

(A) 12
(B) 14
(C) 16
(D) 18
(E) 20

P.S. The answer is D... but why?
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Intern
Joined: 17 Feb 2006
Posts: 11
Followers: 0

Kudos [?]: 0 [0], given: 0

Re: ps theft insurance [#permalink]  02 Mar 2006, 06:13
mand-y wrote:
Lee College insures its students for thefts up tp \$1000. The college
makes no profit, but sets the premium to cover administrative costs of
10 per cent on an average claim of \$120. If the annual premium per
student is \$24, what is the expected number of thefts per 100 students
per year?

(A) 12
(B) 14
(C) 16
(D) 18
(E) 20

P.S. The answer is D... but why?

Hi,

Where is the question taken from ? I'd solve like this:

(premium/admin costs) = (number of thefts / student)

(24/120*10%) = (24/12) = 2 thefts / student, so I would say there should be 200 thefts per 100 students.

Be happy to se other people's answers !

GP
Manager
Joined: 20 Feb 2006
Posts: 213
Followers: 1

Kudos [?]: 5 [0], given: 0

[#permalink]  06 Mar 2006, 07:52
I too got 200.
Explanation is same as that of gpmagnus.
[#permalink] 06 Mar 2006, 07:52
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