There Is an 80% Probability That Hong Will Be in Good

There is an 80% probability that Hong will be in good health during the year and incur only $200 in medical expenses, but there is a 20% probability that he will be ill and incur $20,000 in medical expenses. If an insurance company charged Hong an actuarially fair premium, how much would Hong pay for health insurance?

A) $3,840
B) $4,000
C) $4,160
D) $3,460