j_shreyans wrote:Guys ,
A family pays $800 per year for an insurance plan that pays 80 percent of the first $1,000 in expenses and 100 percent of all medical expenses thereafter. In any given year, the total amount paid by the family will equal the amount paid by the plan when the family's medical expenses total
A. $1,000
B. $1,200
C. $1,400
D. $1,800
E. $2,200
Since the plan pays 80 percent of the first $1,000 in expenses, the family pays 20% of the first $1000 in expenses.
Thus:
The total amount paid by the family = premium + 20% of the first $1000 in expenses = 800 + 200 = 1000.
We can PLUG IN THE ANSWERS, which represent the total amount of medical expenses.
When the correct answer choice is plugged in, the plan will pay the same amount as the family's total ($1000).
D: 1800
Since the plan pays 80% of the first $1000 and 100% of the remainder, the amount paid by the plan = 80% of 1000 + 100% of 800 = 800+800 = 1600.
Too much.
Since the correct answer choice must be SMALLER, eliminate D and E.
B: 1200
Since the plan pays 80% of the first $1000 and 100% of the remainder, the amount paid by the plan = 80% of 1000 + 100% of 200 = 800+200 = 1000.
Success!
The correct answer is
B.
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