A house priced Rs 500000 is insured 70 %. The house gets completely damaged in an accident and the insurance company pays 80% of the insurance. What is the amount paid by the insurance company?

Options

A. Rs 250000
B. Rs 240000
C. Rs 320000
D. Rs 280000

Answer

To solve the problem step by step, we need to follow these calculations:

1. **Determine the Insured Amount:**
The house is priced at Rs. 500,000 and is insured for 70%.
\[ \text{Insured Amount} = \text{Price of the House} \times \text{Insurance Percentage} \]
\[ \text{Insured Amount} = 500,000 \times 0.70 = 350,000 \]

2. **Calculate the Amount Paid by the Insurance Company:**
The insurance company pays 80% of the insured amount.
\[ \text{Amount Paid} = \text{Insured Amount} \times \text{Payout Percentage} \]
\[ \text{Amount Paid} = 350,000 \times 0.80 = 280,000 \]

Thus, the amount paid by the insurance company is Rs. 280,000.