Question

A shop is valued at ₹3,60,000 for 75% of its value. If the rate of premium is 0.9%, find the premium paid by the owner of the shop. Also, find the agents commission if the agent gets commission at 15% of the premium.

Answer 1

Given:

Property value = ₹3,60,000

Rate of premium = 0.9%

Since the shop is insured for 75% of its value

∴ Policy Value = 75% of property value

∴ Policy value = `(75)/(100) xx3,60,000` = ₹2,70,000

Amount of  Premium = 0.9% of policy value

= `(0.9)/(100) xx 2,70,000`

Also, the agent’s rate of commission is 15% of the Premium

∴ Agent’s commission = `(15)/(100) xx 2,430` = ₹ 364.5

∴ Premium paid by the owner of the shop is ₹2,430, and the agent’s commission is ₹ 364.5.