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Home / Aptitude Tests / Commerce / \(\begin{array}{c|c}...
\(\begin{array}{c|c}
\text{Name} & \text{Insure amount...

NameInsure amountActual valueActual lossMr A30,000100,00040,000Mr B40,000120,00050,000Mr C50,00015,00070,000

If Mr A takes a fire insurance policy with average clause, his compensation will be

A.

N15,000

B.

N20,000

C.

N12,000

D.

N25,000

Correct answer is C

Since the policy is with average clause the formula used in calculating his compensation is

Amount insured x total actual lossTotal actual value of property

By this formula the compensation will be

Amount insured = N30,000

Amount loss = N40,000

Actual Value = N100,000

=30,000×40,000100,000

= 1200000000100,000 = 12,000