Question

Dave and Ellen are newly married and living in their first house. The yearly premium on their homeowner's insurance policy is $550 for the coverage they need. Their insurance company offers a 8 percent discount if they install dead-bolt locks on all exterior doors. The couple can also receive a 4 percent discount if they install smoke detectors on each floor. They have contacted a locksmith, who will provide and install dead-bolt locks on the two exterior doors for $95 each. At the local hardware store, smoke detectors cost $20 each, and the new house has two floors. Dave and Ellen can install them themselves.

a. What discount will Dave and Ellen receive if they install the dead-bolt locks?

b. What discount will Dave and Ellen receive if they install smoke detectors?

Answer 1

8% and 4% ( $44 and $ 22 in discount)

Step-by-step explanation:

If the insurance policy is $550, and they get 8% discount in their insurance policy by installing the dead-bolt locks, they will end up paying 550-550*0.08 =$506. ( discount is $44)

On the other hand if they get the smoke detectors they will recieve 4% discount, which means they end up paying 550-550*0.04 = $528 (discount is 22)