Waec Model Questions Vol1 2020 Commerce Question 1
Practice objective / multiple choice question 1 from the 2020 Waec Model Questions Vol1 Commerce examination.
An insurance company calculates the motor insurance premium as follows: 5% of the insured value (IV) is the base premium; a loading of 20% of the base premium is added; a government tax of 2.5% is then applied to the sum of base premium and loading. Customers who had no claim in the previous year receive a 10% discount on the total (including tax). If the insurer expects, on average, one claim costing ₦500,000 for every 0.02 policies per year, what is the minimum insured value (in whole Naira) that a customer must insure so that, after the discount, the premium is at least equal to the expected claim cost?
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About This Question
This is Waec Model Questions Vol1 2020 Commerce Question 1. It is one of the objective questions from the 2020 Waec Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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