Question

A shop valued at Rs.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 = Rs. 2,40,000

Rate of premium = 90 paise% = Rs. 0.9 %

Since, the shop is insured for 75% of its value 

:.  Policy value = 75% of property value

:. Policy value = 75 x 100 x 240000

= Rs. 180000

Now, amount of premium = 0.9% of policy value

= 0 .9/100 x 180000 = Rs.1620