There was water damage to personal property in a home. The items damaged were originally priced at $4000. The items lose value by 11% per year. The items were four years old when they were damaged. The owner had actual cash value coverage with a deductible of $250.

How much will the insurance company pay the policy holder?

$4000
$1990
$250
$3600

4000(1 - 0.11*4) - 250 = _____

B.) 1990

To calculate how much the insurance company will pay the policyholder, we need to consider the depreciated value of the items.

First, we need to calculate the annual depreciation rate. The items lose value by 11% per year. So, the annual depreciation rate is 11%.

Next, we need to determine the depreciated value of the items after 4 years. We can calculate this using the formula:

Depreciated value = Original value - (Original value * Depreciation rate)

Depreciated value = $4000 - ($4000 * 0.11)
Depreciated value = $4000 - $440
Depreciated value = $3560

So, after 4 years, the items are worth $3560.

Now, we need to subtract the deductible of $250 from the depreciated value:

Insurance payout = Depreciated value - Deductible
Insurance payout = $3560 - $250
Insurance payout = $3310

Therefore, the insurance company will pay the policyholder $3310.