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When a car is damaged in an accident, the cost to repair the car is exponentially...

When a car is damaged in an accident, the cost to repair the car is exponentially distributed with a mean of $3,000; however, if the repair costs exceed the value of the car, the insurance company’s coverage is instead based on the value of the car. An insurance policyholder drives a car valued at $10,000 and has a deductible of $1,000. Given that an accident occurs,

a) What is the expected cost to the policyholder?
b) What is the expected cost to the insurance company?

Math   Statistics-And-Probability   
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