Bill Blum insured his hardware store with a fire insurance policy for $88,000 at a cost of $0.84 per $100. Ten months later his insurance company canceled his policy as a result of failure to correct a fire hazard. The cost of the policy to Bill was:

Question

Amiyah Arellano

Business

9 August, 13:31

Bill Blum insured his hardware store with a fire insurance policy for $88,000 at a cost of $0.84 per $100. Ten months later his insurance company canceled his policy as a result of failure to correct a fire hazard. The cost of the policy to Bill was:

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Answers (1)

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Jayla Irwin · Answer 1

Answer:$616

Explanation:

The insurance policy is a policy on an annual basis in which premium are paid in advance to enable the insurance firm to provide cover for the clients.

Cost of insurance

$0.84 * ($88000/100)

= $732.92 per annum

However since the insurance was cancelled after 10 months he will only be responsible for 10 months.

$739.2/12*10

=$616