Desmond is reviewing home insurance options. Policy X costs $1,500 annually with a deductible of $750 Policy Y costs $1,300 annually with a deductible of $1,500 An estimated repair cost from potential damages is $3,000 Which policy offers a lower overall cost if a claim is made this year?
Answer
A
Policy X, with a total cost of 2 dollars comma 000
B
Policy X, with a total cost of 2 dollars comma 250
C
Policy Y, with a total cost of 2 dollars comma 300
D
Policy Y, with a total cost of 2 dollars comma 800
Explanation
When a claim is made, Desmond pays the annual premium plus the deductible. Policy X costs $1,500 + $750 = $2,250 total. Policy Y costs $1,300 + $1,500 = $2,800 total, so Policy X offers the lower overall cost: $2,250.
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