Question

A shop valued at ₹ 2,40,000 is insured for 75% of its value. If the rate of premium is 90 paise percent, find the premium paid by the owner of the shop. 

Answer 1

Given,
property value = 2,40,000
Rate of premium = 90 paise percent = 0.9 %
Since, the shop is insured for 75% of its value
∴ Policy value = 75% of property value 

∴ Policy value = `75/100xx240000` 

= rs 180000
Now, amount of premium = 0.9% of policy value 

=` 0.9/100xx180000`

∴ Premium =  ₹ `1620`