A home was valued at &73,500. It was insured for 80% of its value at a premium of &0.40 per $100. Find the yearly premium.
John/Peter -- please use the same name for your posts.
73,500 * 0.8 = 58,800
0.4(58,800 / 100) = ?
235.2 right
Right. $235.20 yearly premium
To find the yearly premium, we need to calculate 80% of the value of the home and then determine how much the premium would be based on that amount.
Step 1: Calculate 80% of the home's value.
The value of the home is given as $73,500. To find 80% of this value, we multiply $73,500 by 0.80:
$73,500 x 0.80 = $58,800
Step 2: Determine the premium per $100 of the insured amount.
The premium is given as $0.40 per $100 of the insured amount. This means that for every $100 of the insured amount, the premium is $0.40.
Step 3: Calculate the premium for the insured amount.
Since the insured amount is $58,800, we need to determine how many $100 units are in $58,800 and then multiply that by the premium per $100.
To find the number of $100 units in $58,800, we divide $58,800 by $100:
$58,800 ÷ $100 = 588
To find the premium, we multiply the number of $100 units by the premium per $100:
588 x $0.40 = $235.20
Therefore, the yearly premium for the home is $235.20.