Question

a homeowner wants to purchase a home insurance policy for their $250,000 house. the insurance company offers a policy with an annual premium rate of 0.5% of the homes value.
what is the annual premium for this home insurance policy?
$1,500 $12,500 $2,500 $1,250

Explanation:

Step1: Convert percentage to decimal

The premium rate is \(0.5\%\), which is \(0.5\div100 = 0.005\) in decimal form.

Step2: Calculate the premium

Multiply the home's value (\(\$250,000\)) by the decimal rate: \(\$250,000\times0.005=\$1,250\).

Answer:

\(\$1,250\)