Answer:
[tex]P(X=x)= \sum_{y=1}^{x}1000\times\frac{90}{100}\times0.93[/tex]
Step-by-step explanation:
Given the:
The annual premium of special kind of insurance starts at $1000 and reduced by 10% after each year where no claimed has been filed.
Also give that the claim is filed in given year is 0.07, independently of preceding years.
The PMF of the total premium paid upto and including the year when first claim is led
[tex]P(X=x)= \sum_{y=1}^{x}1000\times\frac{90}{100}\times0.93[/tex]
