FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Subject: accounting 

TABLE 20.4
Fire insurance short-rate and cancellation table
Time policy is in Percent of annual rate
force
to be charged
8%
Days: 5
10
20
25
Months: 1
2
3
4
Many companies use Days/365.
10
15
17
19
27
35
44
Time policy is in
force
Months: 5
6
7
8
9
10
11
12
Percent of annual rate.
to be charged
52%
61
67
74
81
87
96
100
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Transcribed Image Text:TABLE 20.4 Fire insurance short-rate and cancellation table Time policy is in Percent of annual rate force to be charged 8% Days: 5 10 20 25 Months: 1 2 3 4 Many companies use Days/365. 10 15 17 19 27 35 44 Time policy is in force Months: 5 6 7 8 9 10 11 12 Percent of annual rate. to be charged 52% 61 67 74 81 87 96 100
Earl Miller insured his pizza shop for $290,000 for fire Insurance at an annual rate per $100 of $0.66. At the end of 10 months, Earl
canceled the policy since his pizza shop went out of business. (Use Table 20.4.)
What was the cost of Earl's short-rate premium and his refund?
Note: Round your answers to the nearest cent.
Short Rate Premium
Refund
Cost
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Transcribed Image Text:Earl Miller insured his pizza shop for $290,000 for fire Insurance at an annual rate per $100 of $0.66. At the end of 10 months, Earl canceled the policy since his pizza shop went out of business. (Use Table 20.4.) What was the cost of Earl's short-rate premium and his refund? Note: Round your answers to the nearest cent. Short Rate Premium Refund Cost
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