Because of an accident Royce was involved in, his insurance company has increased his annual premium for auto insurance by 5.2%. His original policy was set up using the premiums listed below. What is his new annual premium after the increase for the accident?Royce's Auto Insurance Policy Type of Insurance CoverageCoverage LimitsAnnual PremiumsBodily Injury $25/$50,000$22.50 Property Damage$50,000 $144.75 Collision$500 deductible$275.75 Comprehensive$100 deductible$100.00
First add the original annual premiums: $22.50 + $144.75 + $275.75 + $100.00 = $543.00. A 5.2% increase is $543.00 × 0.052 = $28.236. Add the increase to the original premium and round to the nearest cent: $543.00 + $28.236 = $571.24, so the new annual premium is $571.24.
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