5
QuizMultiple Choice

Home and Mortgage Insurance — Quiz

Question 5 • Financial Algebra/Mathematics

A homeowner in a coastal area is considering additional flood coverage for their home insurance. The house is valued at $⁢400,000 , and the additional flood coverage adds 0.2% to the premium. What would be the annual cost of the additional coverage?

Answer
A
1 dollars comma 000
B
600 dollars
C
800 dollars
D
400 dollars

Explanation

Convert 0.2% to a decimal: 0.002. Multiply the home’s value by this rate: $400,000 × 0.002 = $800 per year. Therefore, the annual cost is 800 dollars, choice D.

AI-written and checked against the verified answer.

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