How much would a contractor pay in premiums for $300,000 of coverage at a rate of $8 per $1,000 without any discounts?

How much would a contractor pay in premiums for $300,000 of coverage at a rate of $8 per $1,000 without any discounts?

• A. $1,200
• B. $2,400
• C. $1,500
• D. $2,000

Answer: (B)

To determine the amount a contractor would pay in premiums for $300,000 of coverage at a rate of $8 per $1,000, you'll first need to understand how to calculate the premium based on the coverage amount. The rate is $8 per $1,000 of coverage. To find the total number of $1,000 units in $300,000, divide the coverage amount by $1,000: \[ \text{Number of units} = \frac{300,000}{1,000} = 300 \] Next, multiply the number of units (300) by the rate ($8) to find the total premium: \[ \text{Premium} = 300 \times 8 = 2,400 \] Thus, the contractor would pay $2,400 in premiums for $300,000 of coverage at a rate of $8 per $1,000. This calculation correctly reflects the cost structure provided in the question.

To determine the amount a contractor would pay in premiums for $300,000 of coverage at a rate of $8 per $1,000, you'll first need to understand how to calculate the premium based on the coverage amount.

The rate is $8 per $1,000 of coverage. To find the total number of $1,000 units in $300,000, divide the coverage amount by $1,000:

[

\text{Number of units} = \frac{300,000}{1,000} = 300

]

Next, multiply the number of units (300) by the rate ($8) to find the total premium:

[

\text{Premium} = 300 \times 8 = 2,400

]

Thus, the contractor would pay $2,400 in premiums for $300,000 of coverage at a rate of $8 per $1,000. This calculation correctly reflects the cost structure provided in the question.