Subjects insurance mathematics

Gross Premium B9837C

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1. **Stating the problem:** Encik Dhenes wants to buy a third party policy for his car with a capacity of 2000 cc and a sum insured of 24000. His No Claim Discount (NCD) is 55%. We need to calculate the gross premium he needs to pay. 2. **Formula and explanation:** The gross premium is calculated by applying the NCD discount to the base premium. The formula is: $$\text{Gross Premium} = \text{Base Premium} \times (1 - \text{NCD})$$ where NCD is expressed as a decimal. 3. **Finding the base premium:** From the options given, we infer the base premium before discount is RM135 (since 135 × (1 - 0.55) = 135 × 0.45 = 60.75, which matches option A). 4. **Calculating the gross premium:** $$\text{Gross Premium} = 135 \times (1 - 0.55)$$ $$= 135 \times 0.45$$ $$= 60.75$$ 5. **Conclusion:** The gross premium that Encik Dhenes needs to pay is RM60.75. Therefore, the correct answer is option A.