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if you’ve just recovered from prostate cancer within the last few years, an insurance company might require you to pay a 20% extra premium on your net premium for 3 years. Calculate the gross monthly premium during this 3 years, if the monthly gross premium after the 3 years is $100 and the monthly net premium among this $100 is $70

User Qiang Xu
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2 Answers

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Final answer:

The gross monthly premium during the first 3 years after recovering from prostate cancer, with a 20% extra premium, is $114. This is calculated by adding the 20% extra charge of $14 to the stated gross premium of $100 that applies after the 3 years.

Step-by-step explanation:

To calculate the gross monthly premium for the first 3 years after recovering from prostate cancer, where there is a 20% extra premium on the net premium, you can use the provided information about the net and gross premiums after those 3 years.

The given monthly net premium is $70, and an additional 20% of that is $14 (20% of $70). So, for the first 3 years, the additional cost will be $14 per month on top of the net premium, making the total monthly premium $84 ($70 + $14).

However, this is not the final gross premium. The question states that the gross monthly premium, after the 3 years, is $100. This $100 includes the net premium plus any additional fees or costs the insurance company adds to the net premium to get to the gross premium. Since we do not have information about other fees or costs, we have to assume that the 20% extra premium is the only additional cost. Therefore, to get the gross premium during the first 3 years, you add the additional cost ($14) to the stated gross premium after three years ($100), resulting in a total gross premium of $114 ($100 + $14) for the first 3 years.

User Taron Qalashyan
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Answer:

Gross premium = $100

Monthly Net premium = $70

Therefore 70 x 12 x 3 = 2,520

= 20% of 2, 520

2,520/100 x 20/1

GMP (Gross Monthly Premium) = $540

User Lemon Drop
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