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    I cannot understand how the model answer came to the figure of 1417 for the insurance, could someone please work me through it? Thanks, Here is the question and answer:Name:  Untitled.png
Views: 65
Size:  163.7 KBAttachment 528231528233
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    (Original post by Shazzy69)
    I cannot understand how the model answer came to the figure of 1417 for the insurance, could someone please work me through it? Thanks, Here is the question and answer:Name:  Untitled.png
Views: 65
Size:  163.7 KBAttachment 528231528233
    The year end is 31 MAY
    Insurance of £1600 was paid on 1 JAN
    Insurance payable on 1st jan is for a YEAR so Jan to Dec, but we only need until May
    So 1600 divided by 12 months (a year) times 5 months (until may) gives £666.6
    Add the £750 which was prepaid in the beginning
    This gives £1416.6 round up to £1417

    Hope that makes sense!


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