Question

Bill Blum insured his hardware store with a fire insurance policy for $88,000 at a cost of $0.84 per $100. Ten months later his insurance company canceled his policy as a result of failure to correct a fire hazard. The cost of the policy to Bill was:

Answer 1

Answer:616.00

Step-by-step explanation:

Answer 2

Answer:$616

Step-by-step explanation:

The insurance policy is a policy on an annual basis in which premium are paid in advance to enable the insurance firm to provide cover for the clients.

Cost of insurance

$0.84* ($88000/100)

= $732.92 per annum

However since the insurance was cancelled after 10 months he will only be responsible for 10 months.

$739.2/12*10

=$616