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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.
Solution
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.
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