Question

A fire insurance policy began March 1, 20xx and cost 316.80 for 3 years of coverage. The insured cancelled the policy as of November 16 of that year. What is the amount of the unused policy?

Answer 1

The amount of the unused policy is $105.60.

Step-by-step explanation:

To calculate the amount of the unused policy, we need to determine the number of months the policy was in force and then find the proportion of the total cost that corresponds to those months.

The policy started on March 1, 20xx and was canceled on November 16 of the same year. Therefore, the policy was in force for a total of 8 months.

To find the amount of the unused policy, we calculate:

Unused Policy Amount = (Number of unused months/Total months) x Total cost

Unused Policy Amount = (4/12) x 316.80 = 105.60

Therefore, the amount of the unused policy is $105.60.