Maximum Likelihood Question: Ground Up

I always get confused on what Ground Up means when doing a Maximum Likelihood (MLE) question. Particularly, I worked a problem that read as such (some stuff changed for potential copyright issues:



There is a deductible of 1 and maximum covered loss of 20:

Observe the following Payments: 3, 6, 17, 19

Fit ground-up exponential distribution using MLE.

What is the mean of the fitted distribution?



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So, when I solved this problem, I took the payments, and converted it to losses (4, 7, 18, 20+). Then used the losses to find my fitted parameter.



So...why does the solution to this problem use the payments to solve for the parameter and not the losses? Thanks in advance for the help.

Maximum Likelihood Question: Ground Up