An insurance company has a merit rating system for customers who have not filed a claim in the previous year. For each year that a customer does not file a claim, their rate is reduced by 10%, and a credit of $5 is awarded. If a customer did not file a claim in the nth year, which equation shows the customer's rate in the (n + 1) th year as a function of their rate in the nth year?

A.

f (n + 1) = f (n) - 0.1f (n) - 5

B.

f (n + 1) = f (n) - 0.1f (n) + 5

C.

f (n + 1) = f (n) + 0.1f (n) + 5

D.

f (n + 1) = f (n) - 0.1f (n) - 10

Question

Elizabeth Oneill

Mathematics

1 May, 20:45

An insurance company has a merit rating system for customers who have not filed a claim in the previous year. For each year that a customer does not file a claim, their rate is reduced by 10%, and a credit of $5 is awarded. If a customer did not file a claim in the nth year, which equation shows the customer's rate in the (n + 1) th year as a function of their rate in the nth year?

A.

f (n + 1) = f (n) - 0.1f (n) - 5

B.

f (n + 1) = f (n) - 0.1f (n) + 5

C.

f (n + 1) = f (n) + 0.1f (n) + 5

D.

f (n + 1) = f (n) - 0.1f (n) - 10

+4

Answers (1)

Know the Answer?

Haven Vega · Answer 1

Answer: B

Step-by-step explanation:

For each year that a customer does not file a claim, their rate is reduced by 10%,

This means that every year that passes, we have a subtraction of a 10% (or 0.1 in decimal form)

And also for each yearm we have a credit of $5 awarded, this means that we have an addition of $5.

Then the relation is:

f (n + 1) = f (n) - 0.10*f (n) + $5

The correct option is B