Year 1 ground-up losses have an exponential distribution with mean $1,250. Inflation of 5% impacts all claims from year 1 to year 2. The policy has a deductible of $400 in effect during years 1 and 2. If x₁ denotes the probability that non-zero payments exceed $500 in year 1 and x₂ denotes the probability that non-zero payments exceed $500 in year 2, determine the ratio x₂/x₁.

• [0.5, 0.7]
• [0.98, 1.03]
• [1.1, 1.2]
• [1.3, 1.4]
• 1.5+