---
title: "R Problem due Tuesday 11/27"
author: "Your NAME"
output: pdf_document
---

Acknowledgements: ADD NAMES HERE IF ANYONE ASSISTED YOU.  

**Email knitted pdf file to tleise@amherst.edu by 4pm on the due date.**

## Read over 8.16, and the setting in part b. Here we will perform a simulation in R to estimate the answer to 8.16b (which you will compute using probability theory in your homework due Thursday). 

a. In your own words or using pseudocode, what do you need to do to simulate payouts for the company?

> ANSWER



b. Perform a reproducible simulation and report the expected payout by the insurance company based on 10000 simulated claims.

> ANSWER

```{r}

```


c. How does the value you obtained from the simulation compare to your answer in 8.16b? How much variation do you see in the expected payout based on running your simulation several times? Please run your code several times with different seeds, keeping the different copies in this file as a record.

> ANSWER

*Acknowledgement: Thank you to Prof Amy Wagaman for sharing this R problem for STAT 360.*