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The owner of a house worth $180,000 purchases an insurance policy at the beginning of the year for a price of $1, 000. The deductible on the policy is $5, 000.

If after 6 months the homeowner experiences a casualty loss valued at $50,000. what is the homeowner's net loss? Assume that the continuously compounded interest rate equals 4.0%.

(a) $6,020

(b) $11,020

(c) $50,000

(d) $51,020

(e) None of the above.

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  • Category:- Basic Finance
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