Question

S.
are
The rate of premium is 2% and other
expenses 0.075%. A
cargo worth
Rs.3.50.100 is to be insured so that all its
value and the cost of insurance will be
recovered in the event of total loss.​

Answer 1

Given :

The rate of premium is 2%.

Other  expenses 0.075%.

Worth of cargo , Rs 3,50,100 .

To Find :

The cost of insurance will be  recovered in the event of total loss.​

Solution :

Let the amount of insurance (policy value) be 100,  which includes the premium of 2 and other  expenses 0.075 .

So , value of cargo :

$V=\text{policy value-( premium + other expenses ) }\\\\V=100-(2+0.075)\\\\V=100-2.075\\\\V=97.925$

For property value of Rs 97.925 insurance value is Rs 100.

So , for 3,50,100 property value insurance value is :

$I=\dfrac{350100\times 100}{97.925}\\\\I=357518.5$

Therefore , insurance value is Rs 357518.5 .

Hence , this is the required solution .