A portfolio of annual policies are classified into two classes: class A and class B. You are given the following assumptions about the policies:

• Claim size is always 100 for class A policies and 200 for class B policies
• The probability of observing more than one claim per policy is zero for all policies in the portfolio
• The probability of observing a single claim in a year is 0.05 for class A policies and 0.03 for class B policies
• 25% of the policies in the portfolio belong to class A
• The expected loss for class A policies is 0.9 times the premium and the expected loss for class B policies is 0.8 times the premium.

Using the normal approximation, determine the smallest number of policies required in the portfolio that is divisible by 4 and large enough that the portfolio is profitable at least 95% of the time.

• 1,020
• 1,032
• 1,640
• 1,680
• 1,700