Neco 2019 Commerce Question 36
Practice objective / multiple choice question 36 from the 2019 Neco Commerce examination.
An insurance company offers fire insurance for a building valued at ₦5,000,000. The base premium rate is (0.4\%\) of the sum insured. A loading of (25\%\) is added for fire risk, then a tax of (5\%\) is applied to the loaded premium. The insurer pays a commission of (12\%\) on the loaded premium (before tax). The policyholder also chooses a deductible of ₦200,000. (a) Calculate the net premium the policyholder must pay. (b) If a fire causes a loss of ₦1,200,000, how much will the insurer pay, assuming the deductible applies and there are no other limits?
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About This Question
This is Neco 2019 Commerce Question 36. It is one of the objective questions from the 2019 Neco Commerce examination.
Difficulty level: Medium .
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