Question

The new owner of a house needs hazard coverage for $98,000. The annual premium is $0.44 per $100.00 of the amount insured. The insurance company agreed to make the cost of the policy 2 ½ times the annual rate for a 3 year policy. How much would the monthly insurance payments be to pay for this policy?

Answer 1

monthly insurance payments = $29.94

Step-by-step explanation:

given data

hazard coverage = $98,000

annual premium = $0.44 per $100.00

cost of the policy = 2 ½ times annual rate for 3 year policy

solution

we get here first normal premium cost per year that is

normal premium cost per year = $98000 × 0.44 ×
`(1)/(100)`

normal premium cost per year = $431.2

and

insurance company is offering for new owner discount for purchasing a three year policy

so here the total cost for the three year is

total cost for the three = $431.2 × 2.5 = $1078

and now we get monthly insurance payments for 3 year is

monthly insurance payments =
`(1078)/(36)`

monthly insurance payments = $29.94