A car valued at Rs. 400000 is insured for Rs. 250000. The rate of premium is 5% less 20%. How much loss does the owner bear including the premium if the value of the car is reduced to 60% of its original value?

see full answer

Your Exam Success, Personally Taken Care Of

1:1 expert mentors customize learning to your strength and weaknesses – so you score higher in school , IIT JEE and NEET entrance exams.

An Intiative by Sri Chaitanya

Rs. 20000

Rs. 40000

Rs. 60000

Rs. 70000

answer is D.

(Unlock A.I Detailed Solution for FREE)

Best Courses for You

JEE

NEET

Foundation JEE

Foundation NEET

CBSE

Detailed Solution

Value of the car is Rs. 4,00,000
Value of insurance is Rs. 2,50,000
Premium rate is 5% less 20%
Premium=5% of 2,50,000
=12,500
Additional 20% of Rs. 12,500 discount is 20% of Rs.12,500 =2500
Net premium=Rs. 12,500− Rs.2500
=Rs.10,000
Car reduced to 60% of its original values
Loss=(100−60)% =40%
Loss=40% of Rs.4,00,000
=Rs. 1,60,000
Claim=

\frac{insured value}{property value}

×loss
=

\frac{250000}{400000}

×1,60,000
=Rs. 1,00,000
Loss=Rs. 1,60,000
Loss claim=Rs.1,00,000
Net loss=loss-loss claim=Rs. 60,000
Premium=Rs.10,000
Net loss including premium= Rs.(60,000+10,000)
= Rs. 70000

Watch 3-min video & get full concept clarity