Angela Leichner\'s luxurious home in Georgetown, a neighborhood in Washington, D
ID: 2370563 • Letter: A
Question
Angela Leichner's luxurious home in Georgetown, a neighborhood in Washington, DC, was recently gutted in a fire. Her living and dining rooms were completely destroyed, and the damaged personal property had a replacement price of $26,000. The average age of the damaged personal property was 8 years, and its useful life was estimated to be 11 years. What is the maximum amount the insurance company would pay Angela, assuming that it reimburses losses on an actual cash-value basis? Round the answer to two decimal places.
Explanation / Answer
maximum amount the insurance company would pay will be for straight line depreciation and hence it will pay
26000 * (11-8) / 11 = $7090.91