Cesar’s annual homeowners insurance premium is $972.80. If his home is valued at $253,000, roughly how much is Cesar paying for homeowners insurance?

Question

a.
$0.13 per $100 of value
b.
$0.19 per $100 of value
c.
$0.26 per $100 of value
d.
$0.38 per $100 of value

Answer 1

To find out how much Cesar is paying for homeowners insurance per $100 of value, we can use the following formula:

1. Calculate the value in hundreds:

   \[ \text{Home Value in hundreds} = \frac{\text{Home Value}}{100} = \frac{253,000}{100} = 2,530 \]

2. Divide the annual premium by the number of hundreds:

   \[ \text{Cost per $100 of value} = \frac{\text{Annual Premium}}{\text{Home Value in hundreds}} = \frac{972.80}{2,530} \approx 0.384 \]

The result is approximately $0.384 per $100 of value.

Thus, rounding to two decimal places, the closest answer is:

d. $0.38 per $100 of value.