Rachel just purchased a homeowners insurance policy for her new home that costs $0.43 per $100. Her home is worth $387,500. What is Rachel’s annual homeowners insurance premium?

Question

a.
$1,666.25
b.
$2,208.75
c.
$8,802.33
d.
$9,011.63

Answer 1

To calculate Rachel's annual homeowners insurance premium, we'll use the rate of $0.43 per $100 of the home's value.

1. Determine the number of hundreds in the home's value: \[ \text{Home's value} = 387,500 \] To find the number of hundreds, divide the home's value by 100: \[ \text{Number of hundreds} = \frac{387,500}{100} = 3,875 \]

2. Calculate the premium: Now, multiply the number of hundreds by the cost per hundred: \[ \text{Premium} = 3,875 \times 0.43 = 1,666.25 \]

So, Rachel's annual homeowners insurance premium is \( \boxed{1,666.25} \).

Thus, the correct answer is (a) $1,666.25.