Question

The cost of $500,000 worth of 30-year-term life insurance for Rico is $66.60 per month. If Rico's employer covers 90% of this cost, how much is deducted from Rico's gross income per year for life insurance?

Answer 1

$79.92.

Explanation:

We have been given that the cost of $500,000 worth of 30-year-term life insurance for Rico is $66.60 per month.

First of all we will find 10% of $66.60 as Rico pays 10% (100-90%) of the insurance's cost per month.

`\text{Monthly deduction from Rico's income}=(10)/(100)*\$66.60`

`\text{Monthly deduction from Rico's income}=0.10*\$66.60`

`\text{Monthly deduction from Rico's income}=\$6.66`

Now we will multiply $6.66 by 12 to find the amount deducted from from Rico's gross income per year for life insurance.

`\text{The amount deducted from Rico's gross income per year for life insurance}=\$6.66*12`

`\text{The amount deducted from Rico's gross income per year for life insurance}=\$79.92`

Therefore, an amount of $79.92 is deducted from Rico's gross income per year for life insurance.