Neco Model Questions Vol1 2022 Commerce Question 3

Practice objective / multiple choice question 3 from the 2022 Neco Model Questions Vol1 Commerce examination.

Neco Model Questions Vol1 2022 Commerce Objective / Multiple Choice Medium Difficulty
Question 3 NECO_MODEL_QUESTIONS_VOL1 • 2022 • COMMERCE • objective

A trader insures his stock valued at \(N2{,}000{,}000\). The basic premium rate is 0.5% of the sum insured. Because the stock is considered high‑risk, a loading of 20% is added to the basic premium. A government tax of 5% is then applied to the premium after loading. The insurer offers a 10% discount on the total premium if the trader pays for three years in advance. Determine (a) the annual premium the trader must pay when he chooses the three‑year advance payment, and (b) the total amount saved compared with paying the undiscounted annual premium each year.

Answer Options

A. a) N10,800 per year; b) Total saving = N3,240
B. a) N11,880 per year; b) Total saving = N3,960
Correct Answer C. a) N11,340 per year; b) Total saving = N3,780
D. a) N12,150 per year; b) Total saving = N4,050
Correct Answer
C
Correct Option:
a) N11,340 per year; b) Total saving = N3,780

About This Question

This is Neco Model Questions Vol1 2022 Commerce Question 3. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Commerce examination.

Difficulty level: Medium .

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