Neco Model Questions Vol1 2020 Commerce Question 4
Practice objective / multiple choice question 4 from the 2020 Neco Model Questions Vol1 Commerce examination.
An insurance company offers fire insurance for a small shop with a sum insured of \(\text{₦}30,000,000\). The actuarial pure premium is \(0.8\%\) of the sum insured. The company adds a loading of \(25\%\) for administrative expenses and a tax of \(5\%\) on the gross premium. (i) Compute the final premium payable by the shop. (ii) If each claim amounts to \(\text{₦}150,000\), what is the maximum number of such claims the insurer can cover in a year while still earning a profit of at least \(\text{₦}20,000\)?
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About This Question
This is Neco Model Questions Vol1 2020 Commerce Question 4. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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