Question

a homeowner purchases a property for $480,000 and the home insurance rate is 0.25%. what is the monthly premium for this home insurance policy? $200 $100 $150 $120

Explanation:

Step1: Calculate annual premium

First, find the annual insurance premium. The formula for annual premium is \( \text{Property Value} \times \text{Insurance Rate} \).
The property value is \$480,000 and the rate is \( 0.25\% = 0.0025 \).
So, annual premium \( = 480000 \times 0.0025 = 1200 \) dollars.

Step2: Calculate monthly premium

To find the monthly premium, divide the annual premium by 12 (since there are 12 months in a year).
Monthly premium \( = \frac{1200}{12} = 100 \) dollars.

Answer:

\$100