Question

Michael needs to pay car insurance premiums of $958 two times per year. He has decided to make deposits from each paycheck to a savings account for “Other Expenses (Predictable)” to cover this expense. How much should Michael deposit from each paycheck if the paycheck is bi-weekly?

a.
$80
b.
$74
c.
$160
d.
$37

Answer 1

The correct Option is B. $74

Explanation:

Car insurance which is to be paid two times a year = $958

∴ Car insurance premium paid in first half of the year = $958

and Car insurance premium in the second half of the year = $958

Total Car insurance premium paid in one year = 2 × $958 = $ 1916

It is given that the Premium is to be paid bi-weekly

⇒ In two weeks the premium is paid once

Now, There are total 52 weeks in a year.

`\text{So, the total number of bi weeks = }(52)/(2)=26\text{ weeks}\\\\\text{Total deposited amount per bi weekly = }(1916)/(26)=73.69\approx \$74`

Hence, the required amount of premium to be paid bi-weekly will be $ 74. Therefore, The correct Option is B. $74

Answer 2

Given: Car insurance premium in a first half year = $958

Car insurance premium in the second half year = $958

Total Car insurance premium in year = 2 × $958 = $ 1916

Nature of paid premium is bi-weekly = in 2 weeks

There are total 52 weeks in a year.

So, the total number of bi-week = 26

Total deposited amount per bi-weekly = $ 1916 ÷ 26 =$ 73.69 ≈ $ 74

Hence, the required amount bi-weekly will be $ 74. Therefore, option b. $ 74 is the correct option.