Question

Rocky’s insurance pays 80% of covered expenses after a $500 deductible is paid first. If all of Rocky’s expenses were covered and his insurance paid $16,000, what is the total amount that Rocky paid?

Answer 1

Answer:

$4,500

Explanation:

Let the Rocky’s expenses were 'x'

Therefore,

after deducting $500, amount left = x -500

Now,

The insurance paid 80% of the remaining amount i.e 80% of (x -500)

or

0.80 × (x - 500 ) = $16,000

or

x - 500 = $20,000

or

x = $20,500

Therefore,

The amount paid by Rocky = Rocky's expense - Amount paid by insurance

= $20,500 - $16,000

= $4,500