An insurance company charges the following annual premiums for property insurance:
Buildings Contents
£2.75 per £1,000 insured £4.20 per £1,000 insured.
A property owner wishes to insure a building valued at £142,000 and contents valued at £31,750.
(a) Calculate the total annual cost to the owner of insuring the buildings and contents.
A service fee of 6.25% of the total annual cost is charged when payment is made by 12 equal monthly installments. The service fee is included in the monthly payments.
(b) Calculate:
(i) the service fee
(ii) the amount of each monthly installment.