Question

A house is valued at $198,000. It is to be insured for 80% of its cost. Insurance will cost $6 per $1,000. What is the annual insurance premium?

Answer 1

Answer:  Annual insurance premium would be $950.40.

Step-by-step explanation:

Since we have given that

Value of house = $198,000

Percentage of its cost is insured = 80%

Value of house is insured is given by

$\dfrac{80}{100}\times 198,000\\\\=0.8\times 198,000\\\\=\ 158,400$

Cost of insurance = $6 per $1000.

So, Annual insurance premium would be

$\dfrac{6}{1000}\times 158,400\\\\=0.006\times 158,400\\\\=\ 950.40$

Hence, Annual insurance premium would be $950.40.