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Lee Colle insures its students for thefts up to $1000. The college mak

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Manager
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Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 01 Sep 2009, 12:32
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Question Stats:

29% (02:02) correct 71% (01:37) wrong based on 24 sessions

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Lee Colle insures its students for thefts up to $1000. The college makes no profit but sets the premium to cover administrative costs of 10% on average claim of $120. If the annual premium per students is 24$. What is the expected number of thefts per 100 students per year?

A) 12
B) 14
C) 16
D) 18
E) 20
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 01 Sep 2009, 18:41
yes 18 is the answer.

assume x is number of theft per year

24*100=120*1.1*x -> x = ~18
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 02 Sep 2009, 06:36
dolly12 wrote:
yes 18 is the answer.

assume x is number of theft per year

24*100=120*1.1*x -> x = ~18


What does 24*100 stand for?
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 02 Sep 2009, 06:47
Oh my goodness this one was tough
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 02 Sep 2009, 07:15
1
defoue wrote:
dolly12 wrote:
yes 18 is the answer.

assume x is number of theft per year

24*100=120*1.1*x -> x = ~18


What does 24*100 stand for?


These are premiums paid to insurance company or in other words, revenues of an insurance company. The right side of the equation represents its costs - claims paid by insurance company plus administartive costs associated with these claims. Since there are no profits, revenues=costs.
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 02 Sep 2009, 07:44
Good question. +1 from me
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 02 Sep 2009, 08:10
LenaA wrote:
defoue wrote:
dolly12 wrote:
yes 18 is the answer.

assume x is number of theft per year

24*100=120*1.1*x -> x = ~18


What does 24*100 stand for?


These are premiums paid to insurance company or in other words, revenues of an insurance company. The right side of the equation represents its costs - claims paid by insurance company plus administartive costs associated with these claims. Since there are no profits, revenues=costs.


Thx LenaA. very clear now!!!!
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 09 Sep 2010, 03:07
I don't think that the GMAT will ask these kind of questions. Why post them here at all?
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 28 Sep 2018, 23:20
Why did you multiply 1.1?

Posted from my mobile device
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Re: Lee Colle insures its students for thefts up to $1000. The college mak  [#permalink]

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New post 30 Sep 2018, 09:32
Let there be X thefts.

So total claims = 120*X
premium to cover administrative costs = 10% of 120 X

annual premium is 24 and for 100 students, total money = 2400

120X + 12X = 2400
132X= 2400
X= 18
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Re: Lee Colle insures its students for thefts up to $1000. The college mak &nbs [#permalink] 30 Sep 2018, 09:32
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Lee Colle insures its students for thefts up to $1000. The college mak

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