A car leasing company leases cars to customers for a three-year period. Each year 10% of...
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A car leasing company leases cars to customers for a three-year period. Each year 10% of the vehicles get into accidents. Different accident years are independent. At the end of the lease, 25% of the customers decide to keep their cars. This decision is made independently of their accident history. The company pays a $2,000 bonus for each car returned that has not been in an accident. i = 10% What is the actuarial present value of the bonus payment ($2,000) at the time that the car is leased? A car leasing company leases cars to customers for a three-year period. Each year 10% of the vehicles get into accidents. Different accident years are independent. At the end of the lease, 25% of the customers decide to keep their cars. This decision is made independently of their accident history. The company pays a $2,000 bonus for each car returned that has not been in an accident. i = 10% What is the actuarial present value of the bonus payment ($2,000) at the time that the car is leased?
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