Mathematics Practical No.

3
– Insurance & Annuity
Q.1 A property worth ₹ 4,00,000 is insured with three companies X , Y , Z
for amounts ₹ 1,20,000, ₹ 80,000 , and ₹ 1,00,000 respectively. A fire
caused a loss of ₹ 2,40,000 ; Calculate the amount that can be claimed
from the three companies.
1 . Solution : -

Given , Loss = ₹ 2,40,000

Q.2 A merchant takes fire insurance policy to cover 80% of the value of
his stock. Stock worth ₹80,000 was completely destroyed in a fire.
While the rest of stock was reduced to 20% of its value . If the
proportional compensation under the policy was ₹ 67,200 . Find the
value of the stock.
2. Solution : - ⸫ Now ,

Let the value of the stock = .

⸫ Insured value of the stock = ₹ 67,200

As A Fire broke , stock worth 80,000 completely destroyed and 67,200

balance (
20 % . 67,200
⸫ damage to balance stock = (
=( 67,200

⸫ Total Loss = 67,200 ―

=
Hence , the book value of the stock is
But the Claim received under the policy is 67,200 .
Q.3 A property valued at ₹ 7,00,000 is insured to the extent of ₹
5,60,000 at % less 20%. Calculate the saving made in the
premium . Find the amount of loss that the owner must bear,
including premium , if the property is damaged to the extent of
40% of its value.
3 Solution : - Now ,
Since ,
Here , Property value = ₹ 7,00,000

Insured value = ₹ 5,60,000

The rate of premium = % .
⸫ Premium = × × 5,60,000 = ₹ 3500
⸫ Loss that the owner bear = Loss – Claim earned + Premium paid
But , New premium rate = % ― 20% of at
= ― ×= = ( 2,80,000 – 2,24,000 + 2800 )
⸫ New premium = × × 5,60,000 = ₹ 2,800 . = ( 56,000 + 2,800 )
= 58,800
⸫ saving made in the premium =

Since, damage of the property is 40 % of its value .

⸫ Loss = 7,00,000 ×
Q.4 Find the present value of an annuity immediate of ₹ 20,000 per
annum for 3 years at 10% p.a.compounded annually.
4 . Solution : -

Here , Here , C = ₹ 20,000

n=3
r = 10 % p.a.
⸫ i = = = 0.1

Since,
]

]
Q.5 After how many years would an annuity due of ₹ 3,000 p.a.
accumulated ₹ 19,324.80 at 20% p.a. compounded half yearly ?

[Given (1.2)4 = 2.0736]

5. Solution : -

Here , , ,
1.0736 =

= 1.0736 + 1 =

Now , 2.0736 =

19,324.80
⸫ n = 4 years.
19,324.80

19,324.80