Final answer:
Policy X will pay $60,000 and Policy Y will pay $15,000. Since both policies cover the same risk on a pro-rata basis, the amount each policy pays will be in proportion to their respective limits.
Step-by-step explanation:
Policy X will pay $60,000 and Policy Y will pay $15,000.
Since both policies cover the same risk on a pro-rata basis, the amount each policy pays will be in proportion to their respective limits. In this case, Policy X has a limit of $100,000 while Policy Y has a limit of $25,000. The total loss suffered by Tina is $75,000.
To calculate how much each policy will pay, we need to determine the proportion of the loss that each policy's limit represents. Policy X's limit of $100,000 represents 1/4th of the total combined limit ($100,000 / $400,000). Similarly, Policy Y's limit of $25,000 represents 1/4th of the total combined limit ($25,000 / $400,000).
To find out how much each policy will pay, we multiply the proportion of the limit by the total loss. For Policy X, the calculation is 1/4 x $75,000 = $18,750. For Policy Y, the calculation is 1/4 x $75,000 = $18,750.
However, since Policy X's limit is $100,000, which is higher than the amount calculated, it will pay the maximum limit of $100,000. The remaining amount of the loss ($75,000 - $100,000) is $0, so Policy Y will not pay anything.