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In: Accounting

Rose Collins insured her pizza shop with an $80,000 fire insurance policy at a $.98 annual...

Rose Collins insured her pizza shop with an $80,000 fire insurance policy at a $.98 annual rate per $100. Seven months later she canceled her policy because she failed to correct a fire hazard. What was Rose's cost for the 7-month coverage?

Solutions

Expert Solution

Answer = $457.33

Explanation:

Insuarance policy = $80000

Rate = $0.98 per $100

Therefore annual cost = (80000/100) × 0.98 = $784

Hence, cost for 7 months = 784/12 × 7 = $457.33

ekkarill92 answered 2 years ago
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