Answered

After reviewing her driving record for the past 3 years, Cindy's insurance company offers her a discount of 4.5%. Her original policy premiums are listed below. What is her new annual premium including the discount?

| Type of Insurance Coverage | Coverage Limits | Annual Premiums |
|----------------------------|-----------------|-----------------|
| Bodily Injury | [tex]$50,000/$[/tex]100,000| [tex]$31.75 |
| Property Damage | $[/tex]25,000 | [tex]$120.50 |
| Collision | $[/tex]500 deductible | [tex]$275.75 |
| Comprehensive | $[/tex]100 deductible | [tex]$100.00 |

a. $[/tex]504.24
b. [tex]$523.50
c. $[/tex]528.00
d. $551.76



Answer :

GinnyAnswer
To determine Cindy's new annual premium including the 4.5% discount, we need to follow a step-by-step approach:

1. Calculate the total original annual premium:
We add up all the annual premiums for each type of coverage:
[tex]\[ \text{Total Original Annual Premium} = \$31.75 + \$120.50 + \$275.75 + \$100.00 = \$528.00 \][/tex]

2. Calculate the discount amount:
We know that Cindy is offered a discount of 4.5%. To find the discount amount, we need to apply this rate to the total original annual premium:
[tex]\[ \text{Discount Amount} = \text{Total Original Annual Premium} \times 0.045 = \$528.00 \times 0.045 = \$23.76 \][/tex]

3. Calculate the new annual premium after the discount:
Subtract the discount amount from the total original annual premium to get the new annual premium:
[tex]\[ \text{New Annual Premium} = \$528.00 - \$23.76 = \$504.24 \][/tex]

Therefore, Cindy's new annual premium including the 4.5% discount is [tex]$\$[/tex]504.24$.

The correct answer is:
[tex]\[ \boxed{504.24} \][/tex]

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