Question
Greg just purchased a house for $450,000. His annual homeowners insurance premium is $0.42 per $100 of value. If his annual premium is divided into equal monthly payments, what will Greg have to pay on a monthly basis to keep his home insured?
a.
$1,890.00
b.
$157.50
c.
$1,575.00
d.
$131.25
a.
$1,890.00
b.
$157.50
c.
$1,575.00
d.
$131.25
Answers
GPT-4o mini
To calculate Greg's monthly homeowners insurance premium, we first need to determine the annual insurance premium based on the home's value and the given rate.
1. **Find the annual premium:**
- The home value is $450,000.
- The rate is $0.42 per $100 of value.
- We convert the home value into "per $100" units:
\[
\text{Home value in units of 100} = \frac{450,000}{100} = 4,500
\]
2. **Calculate the annual premium:**
\[
\text{Annual premium} = 4,500 \times 0.42 = 1,890
\]
3. **Convert the annual premium to a monthly premium:**
\[
\text{Monthly premium} = \frac{1,890}{12} = 157.50
\]
Therefore, Greg will have to pay **$157.50** on a monthly basis to keep his home insured.
The answer is **b. $157.50**.
1. **Find the annual premium:**
- The home value is $450,000.
- The rate is $0.42 per $100 of value.
- We convert the home value into "per $100" units:
\[
\text{Home value in units of 100} = \frac{450,000}{100} = 4,500
\]
2. **Calculate the annual premium:**
\[
\text{Annual premium} = 4,500 \times 0.42 = 1,890
\]
3. **Convert the annual premium to a monthly premium:**
\[
\text{Monthly premium} = \frac{1,890}{12} = 157.50
\]
Therefore, Greg will have to pay **$157.50** on a monthly basis to keep his home insured.
The answer is **b. $157.50**.