Example 3
An insurance agent gets commission of 20% on first year premium, 6% on
second and third year's premium and 4% on subsequent years premium on
an insurance policy of Rs. 40,000. Annual rate of prèmium being Rs. 30
per thousand. Find the total earning of the agent for which 5 annual
premiums have been paid.
Answers
Answered by
1
The rate of annual premium is Rs.30 per thousand.
⇒ Annual premium =
1000
30
×40000=Rs.1200
∴ Commission for first year=
100
20
×1200=Rs.240
⇒ Commission for second and third year =2(
100
6
×1200)=2×72=Rs.144
⇒ Commission for fourth and fifth year =2(
100
4
×1200)=2×48=Rs.96
⇒ Total Earning =240+144+96=480
∴ Total Earnings =Rs. 480
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