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kramer
3 years ago
15

A house is closed on October 15. The annual insurance payment is $578 for the fiscal year of July 1 to June 30. The buyers will

assume the seller’s policy. Since the policy has been paid, how much does the buyer owe the seller at closing?
Business
1 answer:
Brums [2.3K]3 years ago
5 0

Answer:

$313

Explanation:

In order to divide the insurance bill between the seller and the buyer, we must first determine the insurance cost per month. We first divide the total premium by 12 months = $578 / 12 = $48.17 per month.

The seller is responsible for paying insurance during June, July, August, September and half of October (15 days). So the seller's share of the bill = 5.5 months x $48.17 = $264.92 ≈ $265

So the buyer owes the seller the difference between the total premium paid and $265 = $578 - $265 = $313

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