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

Answer 1

Annual premium = $0.42 per $100 → 450,000/100 = 4,500 units → 4,500 × $0.42 = $1,890 per year.
Monthly payment = $1,890 ÷ 12 = $157.50.

Answer: b. $157.50