Question

alessia’s car insurance cost - benefit analysis
alessia is evaluating two different car insurance policies to determine which is more cost - effective based on their circumstances. the base premium for policy a is $780 per year, which can be reduced by selecting a higher deductible. policy b starts at $650 per year with no option for a deductible adjustment but offers a discount for installing safety features in the car.
policy b offers a 15% discount for adding an approved anti - theft device
what is the adjusted annual premium for policy b if alessia installs the device?
$

Explanation:

Step1: Identify the base premium and discount rate

The base premium for Policy B is $850, and the discount rate is 15% or 0.15.

Step2: Calculate the discount amount

The discount amount is the base premium multiplied by the discount rate: $850 \times 0.15 = 127.5$.

Step3: Subtract the discount from the base premium

The adjusted premium is the base premium minus the discount: $850 - 127.5 = 722.5$.

Answer:

$722.5