1. The problem statement, all variables and given/known data Suppose that one year, an insurance company incurred dollar damages, X, in four different amounts with probabilities, p(x), shown below: X 0 1000 5000 10000 p(x) 0.7 0.2 0.08 0.02 If the company offers a $500 deductable and wants and wants an expected profit of $150, how much should it charge for the premium? 2. Relevant equations Not even sure what's relevant here. Maybe the expected value is involved somehow: E(x) = sum ( x*p(x) ) = 800 3. The attempt at a solution How would I even go about with a problem like this?