Question

A house valued at ₹ 8,00,000 is insured at 75% of its value. If the rate of premium is 0.80%, find the premium paid by the owner of the house. If agent’s commission is 9% of the premium, find agent’s commission.

Answer 1

Given, Property value = ₹ 8,00,000

Since the house is insured for 75% of its value, Policy value = 75% of property value

= `(75)/(100) xx 8,00,000`

= ₹ 6,00,000

Rate of premium = 0.80%

∴ Amount of premium = 0.80% of policy value

= `(0.80)/(100) xx 6,00,000`

= ₹ 4,800

Agent’s rate of commission is 9% of the premium

∴ Agent’s commision = 9% of premium

= `(9)/(100) xx 4,800`

= ₹ 432

∴ Premium paid by the owner of house is ₹ 4,800 and the agent’s commission is ₹ 432.