A probability question about expected value

[dmatador]

An insurance company issues a one-year $1000 policy against an occurrence A that happens to 2 out of every 100 owners of the policy. Administrative fees are $15 per policy and not part of the companies profit. How much should the company charge per policy to make a profit of $50 per policy?

 

[HallsofIvy]

Well, what have you done on this? You can't just post a problem and expect people to do it for you! If "occurrence A" happens to 2 out of every 100 customers, and the insurance company pays out $1000 for every occurrence, what is the expected payout? What is the expected payout per policy? Now add costs and profit to that.