Kurtis had purchased a renters insurance policy for his new apartment at an annual premium of $588.00. The items covered in the policy included a bicycle kept locked to the railing in front of the apartment. When the bicycle was stolen, the insurance company covered the replacement cost of the bicycle, but told Kurtis that, because of the loss, his premium would increase by 35% if he wished to continue with the policy. What would Kurtis’ new annual premium be if he chose to keep the policy.

Question

Kurtis had purchased a renters insurance policy for his new apartment at an annual premium of $588.00.  The items covered in the policy included a bicycle kept locked to the railing in front of the apartment.  When the bicycle was stolen, the insurance company covered the replacement cost of the bicycle, but told Kurtis that, because of the loss, his premium would increase by 35% if he wished to continue with the policy.  What would Kurtis’ new annual premium be if he chose to keep the policy. 
a.
$36.75
b.
$66.15
c.
$441.00
d.
$793.80

GPT-4o mini · Answer

To calculate Kurtis’ new annual premium after a 35% increase, we first find out what 35% of his current premium ($588.00) is and then add it to the current premium.

Calculate 35% of the current premium: \[ 35% \text{ of } 588 = 0.35 \times 588 = 205.80 \]
Add this amount to the current premium: \[ \text{New premium} = 588 + 205.80 = 793.80 \]

Therefore, Kurtis’ new annual premium would be $793.80.

The correct answer is d. $793.80.