Real Estate Math
A Kentucky home is insured for $275,000. The homeowner buys replacement cost coverage at $0.50 per $100 of coverage. What is the annual premium?
A$1,000
B$1,250
C$1,375✓ Correct
D$1,500
Explanation
Annual premium = ($275,000 ÷ $100) × $0.50 = 2,750 × $0.50 = $1,375. Using the values given ($275,000, $0.50), apply the appropriate formula.. The correct answer is $1,375.. This is a common calculation on the Kentucky real estate exam.
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