Question

Marian purchased a home valued at $465,000. She purchased homeowner insurance for 75% of the value of the home. If the annual premium on the policy was $0.74 perhundred-dollar unit, how much did she pay to the nearest whole cent)?$2,875.50$2,695.00$2,580.75$3,050.74None of these choices are correct.

Answer 1

The value of the police if fot the 75% of the total value of the home value. The 75% of $465000 is:

`465000\cdot0.75=348750`

The value of the insurance is then for $348750. The annual premium of the policy is $0.74 per hunder-dollar unit. Then, we need to estimate the hundred-dollar units in $348750. To estimate them, we need to divide the value by 100:

`(348750)/(100)=3487.5`

The value of the policy is then by 3487.5 hundreds of dollars. Now, we can estimate the amount to be paid yearly:

`0.74\cdot3487.5=2580.75`

Then, the amount to pay, according to the given conditions is $2580.75. Correct answer is the third option.