AnswersFinancial AlgebraMathematicsHome and Mortgage Insurance — QuizQuestion 4
4
QuizMultiple Choice

Home and Mortgage Insurance — Quiz

Question 4 • Financial Algebra/Mathematics

A homeowner wants to purchase a home insurance policy for their $⁢250,000 house. The insurance company offers a policy with an annual premium rate of 0.5% of the home's value. What is the annual premium for this home insurance policy?

Answer
A
1 dollars comma 500
B
2 dollars comma 500
C
1 dollars comma 250
D
12 dollars comma 500

Explanation

Convert the premium rate to a decimal: 0.5% = 0.005. Multiply the home's value by the rate: $250,000 × 0.005 = $1,250, so the annual premium is $1,250 (choice D).

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