A shop valued ` 2,00,000` is insured at 80% of it’s value. If the rate of premium is 4%, then the premium is

Options

A. 6400
B. 6000
C. 6450
D. 6500

Answer

To solve the problem step by step, we will follow the calculations outlined in the video transcript.

**Step 1: Determine the value of the shop.**
The value of the shop is given as ₹2,00,000.

**Step 2: Calculate the insured value.**
The shop is insured at 80% of its value. To find the insured value, we calculate:
\[ \text{Insured Value} = 80\% \text{ of } 2,00,000 = \frac{80}{100} \times 2,00,000 \]
Calculating this gives:
\[ \text{Insured Value} = 0.8 \times 2,00,000 = 1,60,000 \]

**Step 3: Determine the rate of premium.**
The rate of premium is given as 4%.

**Step 4: Calculate the premium amount.**
To find the premium amount, we calculate 4% of the insured value:
\[ \text{Premium} = 4\% \text{ of } 1,60,000 = \frac{4}{100} \times 1,60,000 \]
Calculating this gives:
\[ \text{Premium} = 0.04 \times 1,60,000 = 6,400 \]

**Final Answer:**
The premium amount is ₹6,400.

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