Answer:
A. $33,333.33
Step-by-step explanation:
This is the amount which the owner should have had at the time of loss:
80% of $90,000 = $72,000
But instead of $72,000, the owner had only $40,000.
[tex]\frac{40,000}{72,000} = \frac{5}{9}[/tex]
It means that the owner had maintained [tex]\frac{5}{9}[/tex] of the totoal amount of insurance he should have had.
Therefore, the company will pay [tex]\frac{5}{9}[/tex] of the amount of loss.
[tex]\frac{5}{9} × 60000 [/tex]
[tex]=33,333.33[/tex]
The correct answer option is A. $33,333.33.
