Question

Insurance Premiums An insurance company has a simplified method for determin-
ing the annual premium for a term life insurance policy. A flat annual fee of $150 is
charged for all policies plus $2.50 for each thousand dollars of the amount of the policy.
For example, a $20,000 policy would cost $150 for the fixed fee plus $50, which corre-
sponds to the face value of the policy. If p equals the annual premium in dollars and x
equals the face value of the policy (stated in thousands of dollars), determine the
function which can be used to compute annual premiums.

Answer 1

$$p(x)=150+2.50x$$