Problem Set 6

1.For each of the following situations, what amount would the insurance company pay?

a.Wind damage of 835; the insured has 500 deductible.

b.Theft of a stereo system worth 1,300; the insured has a 250 deductible.

c.Vandalism that does 425 of damage to a home; the insured has a 500 deductible.

Ans.

a) Wind damage of with deductible of .

835 - 500 335

b) Theft of stereo system worth 1,300 with deductible of .

1300 - 250 1050

c) Vandalism of with deductible of .

425 - 500 -75 0

2.Beverly and Kyle Nelson currently insure their cars with separate companies paying 650 and 575 a year. If they insure both cars with the same company, they would save 10 percent on the annual premiums. What would be the future value of...