There was water damage to personal property in a home. The items damaged were originally priced at $4000. The items lose value by 11% per year. The items were four years old when they were damaged. The owner had actual cash value coverage with a deductible of $250.

How much will the insurance company pay the policy holder?

$4000
$1990
$250
$3600

?

3 answers

4000 * 0.89^4 - 250
Amt. Paid = 4000-4000*0.11*4-250 = $1990.
Go with henry2 - I forgot to use linear depreciation.