Question

Solve the following :

A shopkeeper insures his shop and godown valued at ₹5,00,000 and ₹10,00,000 respectively for 80 % of their values. If the rate of premium is 8 %, find the total annual premium.

Answer 1

Given, Property value of the shop = ₹5,00,000 Property value of the godown = ₹10,00,000
Since shopkeeper insures shop for 80% and godown for 80%,
∴ Policy value of shop = 80% of its property value

= `(80)/(100) xx 5,00,000`
= ₹4,00,000 
Policy vale of godown
= 80% of its property value

= `(80)/(100) xx 10,00,000` = ₹8,00,000 
Rate of premium is 8% for the shop as well as for godown.
∴ Amount of premium for the shop
= 8% of its policy value

 = `(8)/(100) xx 4,00,000` = ₹32,000
∴ Amount of premium for the shop
= 8% of its policy value

= `(8)/(100) xx 8,00,000` = ₹64,000
∴ Total premium = amount of premium for the shop + amount of premium for the godown
= 32,000 + 64,000
= ₹96,000
∴ Total premium payable by the shopkeeper is ` 96,000.