Calculate the premiums for the following insurance policies. Mary pays $417.25 for automobile insurance, of which $32 is for comprehensive coverage. One year, Mary has two accidents. What will her premium be the next year? (Note: Subtract the $32 before you take 150 percent, then add the $32 back in to get the new total!) Annual premium?

Answer: $609.88

Explanation:

Since Mary has two accidents in one year, we will use the note in the problem to compute for the new annual premium.

Using the note in the problem, we have the following steps:

- Subtract $32 from the original premium:

Result = $417.25 - $32 = $385.25

- Then, get 150% of the resulting number in the previous step. First, convert 150% to decimal. So, 150% = 1.5

Result = 150% of $385.25 = 1.5 × $385.25 = $577.875

- Finally to get the new premium, we add $32 to the resulting number in the previous step:

New Premium = $577.875 + $32 = $609.875

Since there is no half cents that exists today, we round-off the new premium to the nearest cent. Hence, the new premium is $609.88.