Texas HS Mathematical Models Question of the Day
Test your knowledge with a hand-picked multiple-choice question.
Permian Basin oil field trucks are insured under Policy A: annual premium 3600 per truck. Each claim that exceeds the deductible requires the company to pay 1000 out of pocket per claim, but the policy has an annual stop-loss: no more than 2000 in deductibles per truck per year. Assume every claim exceeds the deductible. Let $n$ be the number of claims on one truck this year.
Which function $C(n)$ best models the truck's total annual cost (premium plus deductibles) as a function of claim frequency $n$?
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