Question

Greg just purchased a house for $450,000. His annual homeowners insurance premium is $0.42 per $100 of value. If his annual premium is divided into equal monthly payments, what will Greg have to pay on a monthly basis to keep his home insured?

Answer 1

$157.50

Explanation:

Cost of the house = $450000

The insurance premium is 0.42 per $100

As the premium is divided in equal monthly payments, so thecalculation becomes:

`(1)/(12)(450000*(0.42)/(100)`

Solving this we get,

`(1)/(12)*1890`

= $157.50

Hence, Greg will have to pay $157.50 on a monthly basis to keep his home insured.

Answer 2

Grey have to pay $157.5 on monthly basis to keep his home insured.

Explanation:

Grey purchased a house = $450,000

Annual Insurance premium = $0.42 per $100 of value.

We need to calculate monthly premium to pay such that home insured.

Now we calculate number of 100 in $450,000

Number of 100 = 4500

The premium value of 1 hundred = $0.42

Total value of 4500 hundred = 0.42 x 4500 = $1,890

Grey total premium in 1 year = $1,890

Now we find monthly premium

We know in 1 year total number of month is 12

In 12 month premium = $1,890

In 1 month premium = 1890÷12 = 157.5

Monthly premium for home insured = $157.5

Thus, Grey have to pay $157.5 on monthly basis to keep his home insured.