Neco 2023 Commerce Question 3

Practice objective / multiple choice question 3 from the 2023 Neco Commerce examination.

Neco 2023 Commerce Objective / Multiple Choice Medium Difficulty
Question 3 NECO • 2023 • COMMERCE • objective

A motor insurance policy has a base premium of \(\text{₦}45,000\). Because the vehicle is in a high‑risk area, the insurer adds a loading of \(12\%\) and then a tax of \(5\%\) on the loaded premium. The policyholder pays the total premium. In a claim, the loss amount is \(\text{₦}80,000\). The insurer will deduct a deductible equal to \(10\%\) of the loss, but the deductible cannot exceed \(\text{₦}20,000\). Determine (a) the amount the insurer will pay on the claim and (b) the net cost to the policyholder after receiving the claim payment.

Answer Options

Correct Answer A. (a) ₦72,000; (b) net gain of ₦19,080
B. (a) ₦60,000; (b) net gain of ₦7,080
C. (a) ₦66,000; (b) net gain of ₦13,080
D. (a) ₦72,000; (b) net gain of ₦19,350
Correct Answer
A
Correct Option:
(a) ₦72,000; (b) net gain of ₦19,080

About This Question

This is Neco 2023 Commerce Question 3. It is one of the objective questions from the 2023 Neco Commerce examination.

Difficulty level: Medium .

View More Neco 2023 Commerce Questions More Neco Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support